UNITED STATES DISTRICT
FEDERAL TRADE COMMISSION, Plaintiff,
ASSOCIATION, INC., a Texas corporation,
MAURICE BILLION, individually and as an officer of the corporation, and
JOYCE BILLION, individually and as an officer of the corporation Defendants.
CIVIL ACTION NO.
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), for its complaint alleges:
1. The FTC brings this action under Sections 5(a) and 13(b) of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a) and 53(b), to obtain temporary, preliminary, and permanent injunctive relief, rescission of contracts, restitution, disgorgement, and other equitable relief for defendants' deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
JURISDICTION AND VENUE
2. Subject matter jurisdiction is conferred upon this Court by 15 U.S.C. §§ 45(a), 53(b) and 28 U.S.C. §§ 1331, 1337(a), and 1345.
3. Venue in the United States District Court for the Northern District of Texas is proper under 15 U.S.C. § 53(b) and 28 U.S.C. §§ 1391(b) and (c).
4. Plaintiff Federal Trade Commission is an independent agency of the United States Government created by statute. 15 U.S.C. §§ 41 - 58, as amended. The Commission enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission may initiate federal district court proceedings by its own attorneys to enjoin violations of the FTC Act and to secure such equitable relief as may be appropriate in each case, including restitution for injured consumers. 15 U.S.C. § 53(b).
5. Defendant Affiliated Vendors Association, a Texas corporation with its principal place of business at 302 Crossland Blvd., Grand Prairie, Texas 75051, is a trade organization for the business opportunity industry. Affiliated Vendors Association also does business as AVA, North American Business Registry, and possibly other names. Affiliated Vendors Association ("AVA") transacts or has transacted business in the Northern District of Texas.
6. Defendant Maurice Billion is an officer of the corporate defendant. At all times material to this complaint, acting alone or in concert with others, he has formulated, directed, controlled or participated in the acts and practices of the corporate defendant, including the acts and practices set forth in this complaint. He transacts or has transacted business in the Northern District of Texas.
7. Defendant Joyce Billion is an officer of the corporate defendant. At all times material to this complaint, acting alone or in concert with others, she has formulated, directed, controlled or participated in the acts and practices of the corporate defendant, including the acts and practices set forth in this complaint. She transacts or has transacted business in the Northern District of Texas.
8. At all times relevant to this complaint, the defendants have maintained a substantial course of trade, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44, by (1) offering to provide consumers throughout the nation with information about businesses and (2) serving as a reference for businesses that pay the AVA a fee.
DEFENDANTS' BUSINESS ACTIVITIES
9. Since at least 1995, and continuing thereafter, the AVA has held itself out to the public as an agency that provides consumers with accurate information about its member companies. The AVA's membership consists mainly of companies engaged in the offering for sale and sale of vending machine business opportunities.
19. The AVA's members often instruct prospective purchasers to contact the AVA to verify the good standing of the member's business and obtain additional information about them and their business opportunity.
11. When consumers contact the AVA seeking information about the member company, defendants give a positive report about the member business. In some instances, defendants tell consumers that they have evaluated the member business and claim to have reviewed what happens after the sale of the vending machine business opportunity to determine whether the member business keeps their promises to their purchasers and backs their warranty. Defendants tell consumers that based on this review, they have determined that the member business keeps its promises to purchasers.
12. Defendants tell consumers, when asked, that they charge members an annual fee of $120. Defendants do not tell consumers that in addition to an annual fee, defendants charge members a set fee, usually $20, each time the AVA gives a recommendation to the consumer about the particular member. On a periodic basis, the AVA provides members with a notification or invoice containing the name and telephone number of each consumer or prospective investor who called the AVA requesting information about the member.
13. Based at least in part upon defendants representations about their members and upon the belief that they are dealing with an independent organization, consumers often invest in the business opportunity offered by defendants' members.
VIOLATIONS OF SECTION 5 OF THE FTC ACT
14. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits unfair or deceptive acts or practices in or affecting commerce.
15. In numerous instances, in the course of offering information about a member business to consumers, the defendants have represented, expressly or by implication, that they provide independent and reliable reports which accurately describe their members' business practices.
16. In truth and in fact, the defendants do not provide consumers with independent or reliable reports which accurately describe their members' business practices.
17. Therefore, defendants' representations as set forth in Paragraph 15 are false and misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
28. Believing that the AVA provides independent and reliable reports about its members, consumers are likely to rely on the defendants' reports and invest in ventures that can entail considerable risk and expense. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and harm the public interest.
THIS COURT'S POWER TO GRANT RELIEF
19, Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement and restitution, to prevent and remedy any violations of any provision of law enforced by the Commission.
20. This Court, in the exercise of its equitable jurisdiction, may award other ancillary relief to remedy injury caused by the defendants' law violations.
PRAYER FOR RELIEF
WHEREFORE, plaintiff the Federal Trade Commission, pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), and the Court's own equitable powers, requests that the Court:
Award plaintiff the costs of bringing this
action, as well as such other and additional relief as the Court may
determine to be just and proper.
WILLIAM E. KOVACIC
DANA C. BARRAGATE
LARISSA L. BUNGO
Attorneys for Plaintiff
SUSAN E. ARTHUR