UNITED STATES OF AMERICA
In the Matter of
FILE NO. 982-3525
The Federal Trade Commission has conducted an investigation of certain acts and practices of Federated Department Stores, Inc. ("proposed respondent"). Proposed respondent, having been represented by counsel, is willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore,
IT IS HEREBY AGREED by Federated Department Stores, Inc., by its duly authorized officers, and counsel for the Federal Trade Commission that:
1. Proposed respondent Federated Department Stores, Inc., is a Delaware corporation with its principal office or place of business at 7 West Seventh Street, Cincinnati, Ohio 45202. Proposed respondent conducts relevant business through, among other affiliates or subsidiaries, FDS National Bank, The Bon, Inc., Bloomingdales, Inc., Burdines, Inc., Rich's Department Stores, Inc., Macy's East, Inc., Macy's West, Inc., and Stern's Department Stores, Inc.
2. Proposed respondent admits all the jurisdictional facts set forth in the draft complaint.
3. Proposed respondent waives:
4. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission, it, together with the draft complaint, will be placed on the public record for a period of sixty (60) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondent, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not constitute an admission by proposed respondent that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.
6. The Commission reserves the right to file an action for consumer redress pursuant to Section 19 of the Federal Trade Commission Act, 15 U.S.C. § 57b, based on the order issued in this proceeding. Proposed respondent hereby waives its right to assert a defense based on the statute of limitations (as provided by 15 U.S.C. § 57b(d)) on account of the running of time from the date that this order is signed by respondent, in any action brought by the Commission pursuant to Section 19 of the Federal Trade Commission Act. This waiver shall expire one year following the proposed respondent's fulfillment of its obligations to make payments to affected consumers, as required in the restitution sections of the settlement agreements reached by proposed respondent with the Attorneys General of various states and the class representatives in the Hurst class action lawsuit, that resolve challenges to conduct similar to that challenged by the Commission in this proceeding. However, the Commission will not bring any action against proposed respondent pursuant to Section 19 of the Federal Trade Commission Act provided that, by September 30, 1999, proposed respondent has made available to consumers payments consisting of either cash refunds or credits to their accounts, including interest and additional cash payments, of not less than $ 8.2 million, not including attorney fees, administrative costs, and any payments to the states themselves. The Commission reserves the right to pursue any legal remedy that it may have available, including an action pursuant to Section 19, in the event that the Commission believes that proposed respondent has failed to fulfill its obligations to make payments to affected consumers, as required in the restitution sections of the settlement agreements reached by proposed respondent with the Attorneys General of various states and the class representatives in the Hurst class action lawsuit, that resolve challenges to conduct similar to that challenged by the Commission in this proceeding.
7. This agreement contemplates that, if it is accepted by the Commission, and if that acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondent, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery of the complaint and the decision and order to proposed respondent by any means specified in Section 4.4 of the Commission's Rules shall constitute service. Proposed respondent waives any right it may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order.
8. Proposed respondent has read the draft complaint and consent order. It understands that it may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final.
For purposes of this order, the following definitions shall apply:
IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the collection of any debt, shall not:
IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, shall not make any material misrepresentation, expressly or by implication, in the collection of any debt subject to a pending bankruptcy proceeding.
IT IS FURTHER ORDERED that respondent, and its successors and assigns, for five (5) years after the date of issuance of this order, shall maintain and upon request make available to the Federal Trade Commission business records demonstrating their compliance with the terms and provisions of this order, including but not limited to all reaffirmation agreements signed by consumers and records sufficient to show that the reaffirmation agreements were filed in bankruptcy courts and were subsequently approved by bankruptcy courts as part of the underlying bankruptcy proceedings, if required by the United States Bankruptcy Code.
IT IS FURTHER ORDERED that respondent, and its successors and assigns, for five (5) years after the date of issuance of this order, shall deliver a copy of this order to all current and future principals, officers, directors, managerial employees, and bankruptcy court representatives having debt collection responsibilities with respect to the subject matter of this order (collectively, "bankruptcy personnel"), and shall secure from each of these persons a signed and dated statement acknowledging receipt of the order. Respondent shall, for five (5) years after each of these statements acknowledging receipt of the order is signed and dated, maintain and upon request make available to the Federal Trade Commission for inspection and copying the statements. Respondent shall deliver this order to current bankruptcy personnel within thirty (30) days after the date of service of this order, and to future bankruptcy personnel within ninety (90) days after the person assumes a position as bankruptcy personnel.
IT IS FURTHER ORDERED that respondent shall notify the Commission at least thirty (30) days prior to any change in the corporation in each case that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date the action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining this knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.
IT IS FURTHER ORDERED that respondent shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.
This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of the complaint will not affect the duration of:
Provided, further, that if the complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date the complaint is filed and the later of the deadline for appealing the dismissal or ruling and the date the dismissal or ruling is upheld on appeal.
Signed this ___ day of ____, 1999.
FEDERATED DEPARTMENT STORES, INC.
RANDALL H. BROOK
ROBERT J. SCHROEDER
CHARLES A. HARWOOD