Appellant Leon A. Tashof is engaged in the retail trade as New York Jewelry Co. (NYJC). His store is located in an area that serves low-income consumers,1 many of whom hold low-paying jobs, and have no bank or charge accounts.2 About 85 percent of NYJC's sales are made on credit. The Commission found, after a Hearing Examiner had dismissed the charges as unsubstantiated, that NYJC falsely advertised the availability of discount eyeglasses, and misrepresented its prices and credit practices. NYJC claims that the evidence is insufficient to support the Commission's findings, and that in any event the findings do not justify the order entered against it. We affirm the findings, and enforce the order.

The Commission's findings fall into four categories: (A) those with respect to false advertising of eyeglasses; (B) those with respect to false advertising of discount prices; (C) those with respect to misrepresenting credit charges; and (D) those with respect to misrepresenting "easy credit."

A. False Advertising of Eyeglasses: The Commission first found that NYJC employed a "bait and switch" maneuver with respect to sales of eyeglasses.3 The evidence showed that NYJC advertised eyeglasses "from $7.50 complete," including "lenses, frames and case." The newspaper advertisements, but not the radio advertisements, mentioned a "moderate examining fee." During this period, NYJC offered free eye examinations by a sign posted in its store, and through cards it mailed out and distributed on the street.4 NYJC claimed that it offered $7.50 eyeglasses only to persons with their own prescriptions. But we have no doubt that the record amply supports the Commission's finding that the advertising campaign taken as a whole offered complete eyeglass service for $7.50.5

That much shows "bait." There was no direct evidence of "switch" — no direct evidence, that is, that NYJC disparaged or discouraged the purchase of the $7.50 eyeglasses, or that the glasses were unavailable on demand, or unsuited for their purpose. The evidence on which the Commission rested its finding was a stipulation that out of 1,400 pairs of eyeglasses sold each year by NYJC, less than 10 were sold for $7.50 with or without a prescription.6 NYJC claims that this evidence does not support the finding. We disagree.

It seems plain to us that the Commission drew a permissible inference of "switch" from the evidence of bait advertising and minimal sales of the advertised product.7 At best only nine sales — 64/100 of one percent of NYJC's eyeglass sales — were made at $7.50. The record leaves unexplained why NYJC's customers, presumably anxious to purchase at as low a price as possible, would so consistently have bought more expensive glasses if suitable glasses at $7.50 were available.8 Further, NYJC continued to advertise the $7.50 glasses for a year and a half despite the scarcity of sales, a fact which tends to support a finding of a purpose to bring customers into the store for other reasons.9 This evidence, we think, was sufficient to shift the burden of coming forward to the respondent. But NYJC offered no evidence to negate the inference of "switch." The relevant facts are in NYJC's possession, and it was in the best position to show, if it could be shown at all that the $7.50 glasses were actually available in the store.10 Yet the most NYJC could produce was its sales manager's denial that the $7.50 glasses were disparaged. NYJC never did point to even a single sale of the advertised product.11

B. False Advertising of Discount Prices: There is no dispute that NYJC claimed to be a discount seller of eyeglasses. Nor is there any question that the sales slips introduced by the FTC were sufficient to show NYJC's actual prices. NYJC's claim is that the Commission erred in relying on expert testimony of prevailing prices, and in computing the prices against which NYJC's were compared.

The Commission's staff presented the only evidence of prevailing prices: the testimony of Dr. Zachary Ephraim, an optometrist.12 Since optometrists are a major retail outlet for eyeglasses, and perform a service closely comparable to that provided by NYJC — examining eyes and filling prescriptions — Dr. Ephraim was well qualified to testify about prevailing prices. We hold that his uncontradicted testimony was a sufficient basis for the Commission's findings.13

The Commission determined the generally prevailing prices of eyeglasses on the basis of Dr. Ephraim's testimony of the usual price charged by most optometrists in the trade area.14 NYJC first claims that the Commission erroneously ignored the expert's statements that some sellers might charge higher prices. We disagree, because Dr. Ephraim referred only to some extremely high prices that a relatively few sellers might charge. Thus the record as a whole supports the Commission's finding of generally prevailing eyeglass prices, i. e., the prices to which NYJC's must be compared in considering the charge that its representations of discount prices were false.15 NYJC's second claim concerns the Commission's refusal to include in the prevailing price the amount which the consumer would have had to pay for an eye examination. Since NYJC offered "free" eye examinations, it could be argued that no adjustment for examinations was required. But the Commission did make allowance for NYJC's actual cost of the examination. We cannot say that this treatment was unreasonable.16 It is worth noting that even if the prevailing prices were computed as NYJC has urged, NYJC's customers still paid a higher than prevailing price more often than not.17

C. Failure to Disclose Credit Charges: Nearly all the evidence regarding NYJC's failure to inform its customers fully and adequately of all credit charges was documentary.18 It showed that NYJC used three different contract forms during the time in question. All three were materially deficient in one respect or another. The first form failed to disclose the annual percentage charge on the unpaid balance, the dollar amount of the credit charge, and the cash price of the item. The second form failed to show either a monthly or annual percentage interest rate. The third form failed to reveal the total obligation, the finance charge in dollars, and the annual percentage interest rate. Moreover, there was substantial evidence that NYJC often failed even to provide all the information contemplated by the contract form. Also, the evidence revealed unexplained discrepancies among NYJC's contract forms, its own internal records, and the "customer cards" it handed to credit clients.

We think the record amply supports the Commission's finding that NYJC's credit practices were deceptive. The offer of credit without disclosure of the charges therefor in an understandable fashion is, of course, likely to prevent the customer from learning about the cost of credit. This is particularly true for NYJC's customers, many of whom both lack the sophistication to make the complex calculation of credit costs for themselves, and must depend to a large extent on credit for their purchases.19

D. False Representation of "Easy Credit": NYJC's advertising was permeated with references to "easy credit."20 The complaint charged that the credit was not easy for two reasons: first because NYJC sought "often with success, to obtain garnishments against [customer's] wages," after having extended credit "without determining [the customer's] credit rating or financial ability to meet payments;"21 and second because NYJC sold goods "at unconscionably high prices that greatly exceeded the prices charged for like or similar merchandise by other retail establishments."22 We hold that the record supports the Commission's finding that NYJC's representations of easy credit were misleading because of its rigorous collection policy. Consequently, there is no need to decide whether the Commission's finding that the representations were misleading because of the store's "greatly excessive prices" is adequately supported.

1. Rigorous Collection Policy — The Commission found that NYJC's collection policies were rigorous indeed, and therefore its representation of easy credit was misleading. The record supports this finding.23

We have no doubt that the Commission was within its discretion in interpreting "easy credit" to refer not only to easy availability but also to easy terms and leniency with respect to repayment and collection.24 The Commission noted the oppressive effect of wage garnishments on persons who, like many of NYJC's customers, have low paying jobs, and found that NYJC regularly garnished its customers' wages.25 In one year, for example, it sued some 1600 customers — about one out of every three. Firms with many more customers than NYJC used the garnishment process much less often.26 NYJC, which possessed all the relevant facts, offered nothing to negate the Commission's finding that it pursued a rigorous collection program, and, indeed, in this court did not challenge the Commission's opinion on this point.

NYJC does claim, however, that the complaint did not fairly apprise it of the charge that its easy credit representations might be found misleading on the basis of its collection policy.27 Although the complaint is hardly a model of clarity, we think that a fair reading provides sufficient notice.28 It is clear that the main charge is misrepresentation by use of the term "easy credit," not, as NYJC has urged throughout the course of proceedings, unconscionably high prices per se. High prices were but one of the two independent grounds said to make the representation deceptive. The other was NYJC's collection policies. Moreover, NYJC has claimed no prejudice from the alleged vagueness of the complaint.29 It has pointed to no evidence it might have introduced if it had been given clearer notice of the charge. And by the time of the hearing it must have known that its collection policies were under attack, for it agreed to a stipulation about the number of garnishments it, and other stores, filed each year.

2. Greatly Excessive Prices — The other ground for the Commission's ultimate conclusion that NYJC's representations of "easy credit" were misleading was its finding that NYJC charged "greatly excessive prices."30 We need not decide whether this finding is adequately supported, however, for, even if it is not, we have no "substantial doubt [that] the administrative agency would have made the same ultimate finding [i. e., that NYJC's representations of "easy credit" were misleading] with the erroneous findings or inferences out of the picture."31 In this case it is clear from the structure of the Commission's opinion32 and the reasons it gave in support of its order33 that NYJC's representations of "easy credit" were considered misleading on two separate grounds, to wit, the store's rigorous collection practices and its greatly excessive prices.

NYJC attacks only two parts of the Commission's order — one paragraph which orders it to disclose certain credit information, and one paragraph which forbids it to advertise discount prices without having taken a survey of comparative prices.34

A. Disclosure of Credit Terms: To combat NYJC's failure to reveal its credit terms (see part I (C)), the Commission ordered it to disclose, both orally and in writing, a variety of factors relating to credit charges in its installment contracts.35 NYJC argues that the enactment of the new Truth in Lending Act36 shows that the Commission had theretofore lacked the power to order affirmative disclosures of credit information.37 The argument is without merit. The Act establishes minimum standards of disclosure which the Commission may enforce without proving unfairness and deception on a case by case basis. It was not intended to cure a previous deficiency in Commission power to deal with individual cases, and to shape its remedies to the facts of these cases.38

Equally unpersuasive is NYJC's contention that the Truth in Lending Act sets the bounds of an affirmative disclosure order. NYJC has pointed to nothing in the terms of the Act or its legislative history which supports this view. The sole question for us is whether the remedy chosen by the Commission bears a reasonable relationship to the violations uncovered.39 Viewed in this light, NYJC's attacks on the disclosure order are unavailing. The Commission's demand that NYJC disclose credit terms in all transactions, for example, is reasonably related to its finding that many of NYJC's sales involved a small dollar credit charge, but a high percentage rate, and that credit information is crucial to NYJC's low-income customers. Thus the fact that the Truth in Lending Act exempts sales involving minimal dollar charges40 is not controlling. Similarly, the Commission's order that NYJC disclose its credit terms orally41 is reasonably related to the finding that many of NYJC's customers are unsophisticated consumers who would not benefit from written disclosure alone. That the Truth in Lending Act has no such requirement does not invalidate this portion of the order.

B. Advertising Discount Prices: The Commission ordered NYJC to cease and desist from representing that it sells "any article of merchandise" at a discount price (see part I (B)), unless it first takes a "statistically significant survey" which shows that the prevailing price is "substantially" above NYJC's. The order apparently subjects NYJC to civil penalties42 if it advertises discount prices without having taken the survey, even if the advertisement is true.43

The Commission claims that this remedy constitutes "reasonable action * * * calculated to preclude the revival of the illegal practices."44 We agree. NYJC was shown to have taken little account of the true level of prices in the trade area.45 We think the FTC may enter an order to ensure that this is not repeated in the future, without having to determine whether respondent's previous conduct was due to inadvertence, bad faith, or a kind of inattention or negligence involving some intermediate culpability. Where a businessman has wrought a wrong on the public, he may be held to a reasonable business procedure that will prevent repetition of that wrong, and in view of his past record he will not be permitted to object that his own approaches might also avoid this wrong in the future, perhaps by happenstance and perhaps only on occasion.

NYJC has offered nothing either here46 or before the Commission47 to support its assertion that the statistical survey requirement is unduly burdensome. The requirement does not appear onerous on its face. Thus the order must be enforced.

Enforced.

ROBB, Circuit Judge (concurring in part; dissenting in part):

I concur in all but Part IIB of the majority opinion. In my judgment the Commission exceeds its authority when it requires NYJC to conduct a "statistically significant survey" of relevant prices in its trade area before advertising a "discount price". This requirement shifts to NYJC the burden of proving its innocence; and as the majority opinion concedes, might subject NYJC to heavy civil penalties even if its advertisement is true. I would affirm after eliminating this part of the order.