Florida-Based Company Settles FTC Charges

The Defendants Banned From Selling Greeting Card Business Opportunities

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Greeting Cards of America, Inc. (GCA), and its owners, Gerald Towbin and Susan Towbin, are banned from marketing any franchise, business venture, or business opportunity as part of a settlement with the Federal Trade Commission. The FTC alleged that the defendants, as well as American Eagle Placements and its owner, Forrest Adams, used deceptive tactics in selling greeting card display rack business opportunities. In addition to the ban, the settlement prohibits the GCA defendants from making material misrepresentations in connection with the sale of any goods or services, and requires them to pay more other $400,000 in consumer redress.

In April 2003, the FTC filed a complaint in federal district court against GCA, based in Plantation, Florida; husband-and-wife team, Gerald (Jerry) Towbin and Susan Towbin; and American Eagle Placements, based in Stone Mountain, Georgia, and its owner, Forrest Adams.

The complaint alleged that the defendants were engaged in the marketing and sale of a greeting card business opportunity that defrauded consumers out of at least $3 million. According to the FTC, the GCA defendants made earnings and success claims in their ads that overstated the amount consumers could expect to make from a GCA business opportunity. The FTC alleged that Gerald Towbin, also known as Alex Carr, used the alias “John Grant” to pose as a reference for GCA, and that Susan Towbin used the aliases “Mary Grant” and “Sandy Grant” to pose as a reference for GCA. In addition, the American Eagle defendants operated a locator service that consumers paid for separately to place the greeting card racks GCA sold to them. The complaint alleged that the American Eagle defendants misrepresented the quality of location that they could obtain and the assistance they would provide.

The settlement announced today bans the GCA defendants from selling or advertising any franchise, business venture, or business opportunity in the future. The case against the American Eagle defendants was settled in February 2004.

The settlement also prohibits the GCA defendants from making misrepresentations about the income, sales volume, or profit that a prospective purchaser could make from the sale of any good or service; the income, sales volume, or profit achieved by other purchasers of the goods or services; the authenticity of any reference; the territorial rights to, or amount of, competition within any geographic territory; and the existence or quality of locations for machines or racks used to dispense goods. In addition, the settlement prohibits the defendants from misrepre-senting any material restriction, limitation, or condition to purchase, receive, or use any goods or services; any material aspect of the performance, efficacy, nature, or central characteristics of any goods or services; any material aspect of the nature or the terms of the seller’s refund, cancellation, exchange, or repurchase policies; the total costs to purchase, receive, or use; and the quality of any good or service. The settlement further prohibits the defendants from selling their customer lists.

In addition, the settlement requires the defendants to pay over $400,000. Finally, the settlement contains various recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance.

The Commission vote to authorize the staff to file the proposed stipulated final judgment and order was 5-0. The FTC filed the order in the U.S. District Court, Southern District of Florida, in Miami, on April 28, 2004. The Judge signed the order on May 3, 2004. The FTC’s Southeast Region - Atlanta handled the investigation.

NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated final judgments have the force of law when signed by the judge.

Copies of the stipulated final judgment and order are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. X030044)
(Civil Action No. 03-60746-Civ-Gold)

Contact Information

Media Contact:
Brenda Mack
Office of Public Affairs
Staff Contact:
Andrea Foster or Harold Kirtz
FTCs Southeast Region - Atlanta
404-656-1356 or 404-656-1357