Nishika - the story (... long)

[P3D sid herbage <sidh@xxxxxxxxxxxx>]

P3D Michael Kersenbrock wrote:

> As an aside: I went by Nishika in Henderson, Nevada last week when I was there
> visiting my parents, and they are still quasi-there.  Meaning the name is still
> on the building and Tee-shirts are still in the lobby.   Of course, they still
> don't have any people there either.  So maybe somebody is still paying their rent? :-)

A trip to http://www.ftc.gov/opa/9603/nishika2.htm will net you the following which I 
think explains a lot about the Nishika state of affairs:

.................................................................................
-The Federal Trade Commission has negotiated two settlements that could result in as
much as $11.3 million for the victims of a nationwide prize-promotion telemarketing
scheme run out of Henderson, Nevada. The defendants in the case -- Nishika, Ltd., five
other companies and two individuals -- allegedly induced consumers nationwide to pay
up to $700 each for a 3-D camera and other items by engaging telemarketers to tell
the consumers that they had won a valuable award. In fact, the FTC charged in federal
district court, most consumers received only travel certificates of little value.

The defendants have signed settlement agreements with the FTC to end the litigation.
The first settlement includes the FTCs monetary claim and has been approved by two
federal bankruptcy courts; the second would bar the defendants from engaging in
similar deceptive schemes in the future and requires federal district court approval to
become binding.

The FTC filed its charges in the case in November 1994 against Nishika, American
3-D, Ltd., Nishika Corporation, American 3-D Corporation, Nishika 3-D Camera Sales,
Inc. and James D. Bainbridge, who is president, owner or has a controlling interest in
these companies; as well as Bentley Industries, Inc., of Los Angeles, and company
owner and president, Daniel A. Fingarette, also known as William A. Bill Burke.

The defendants allegedly solicited hundreds of thousands of consumers through
certificates and other notifications. When consumers called in response, they were led
to believe they had been specially selected to receive one of several awards, ranging
from a cash award (typically, $1,250) to a new car, the FTC alleged. In order to receive
their prizes, consumers were persuaded to authorize a one-time charge of up to $700
-- often referred to as a shipping and handling fee -- on their credit cards. The 
award
consumers almost always received was a travel voucher that contained a number of
additional costs and restrictions, making it nearly impossible to use, the FTC charged. 

The defendants have each filed voluntary bankruptcy petitions, and the FTC filed a claim
in each of the proceedings in the amount of $80 million. The bankruptcy courts now
control all of the defendants assets. The bankruptcy settlement negotiated by the FTC
allows for the competing claims of other creditors against the defendants and sets forth
the FTCs priority claim. Based on the formula in the settlement, the FTC could receive
as much as $9.6 million for a consumer redress fund, with another $1.7 million going to
consumers who already are listed as creditors in the bankruptcy proceedings.

The district court settlement would prohibit the defendants, in connection with any
marketing program involving a premium incentive item, from misrepresenting:

     the value, quality, nature or content of the good, service, or premium incentive
     item; 
     the value of the premium incentive item compared to the amount of money the
     consumer will pay; 
     the likelihood that any consumer will receive a specific premium incentive item;
     and 
     the terms or conditions governing any prize promotion, including whether the
     consumer must make a purchase or payment.

In addition, the settlement would require the defendants, when engaging in
telemarketing, to disclose at the beginning of the initial contact with consumers the 
fact
that they are selling goods or services. Moreover, before the consumer pays, the
defendants must clearly and conspicuously disclose all material terms and conditions of
the offer, including any necessary payments the consumer must make, procedures they
must follow to obtain the premium item, the defendants refund policy or the fact that 
they
have no such policy and, when a consumer asks, the reasonable retail value of the
premium item.

The settlement also would require the defendants to take reasonable steps to monitor
any entities engaged in a telemarketing sales program to which they are providing
assistance, in order to ensure that the entities are complying with the above 
provisions,
and to terminate their relationship with anyone who repeatedly violates these 
provisions.
Further, the defendants would be prohibited from providing assistance -- including
supplying goods, services or premium incentive items; providing customer lists; and
processing consumer credit card charges -- to entities that the defendants know or
should know are making the false or misleading representations prohibited by the
settlement. 

The settlement also prohibits the defendants from transferring their customer lists to
third parties.

Finally, there are various reporting and other requirements in the district court 
settlement
that would assist the FTC in monitoring the defendants compliance.

The Commission vote to approve the settlements for filing in the respective courts

was 5-0. The bankruptcy settlement was approved by the U.S. Bankruptcy Courts for the
Central District of California and the District of Nevada on Feb. 14 and 15, 
respectively.
The settlement with the injunctive provisions was filed in the U.S. District Court for 
the
District of Nevada, in Las Vegas, on March 15, and is subject to that courts approval.
This case was handled by the FTCs Seattle Regional Office with assistance from the
Nevada Attorney Generals office, and the Houston, Texas, Better Business Bureau,
among other entities.

NOTE: These settlements are for settlement purposes only and do not constitute an
admission by the defendants of law violations. They have the force of law when
approved by the courts.

Copies of the settlements, as well as the November 1994 complaint detailing the FTC
charges, are available from the FTCs Public Reference Branch, Room 130, 6th Street
and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the
hearing impaired 202-326-2502. To find out the latest news as it is announced, call the
FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials
also are available on the Internet at the FTCs World Wide Web site at: 
http://www.ftc.gov


(FTC File No. X950016)

(Civil Action No. U.S. District Court: CV-S-94-00967-HDM (RJJ))

Bankruptcy Court in the District of Nevada:

     the Nishika companies:

     BK-S-94-24385 LBR
     BK-S-94-24479 LBR
     BK-S-94-24480 LBR
     BK-S-94-24481 LBR
     BK-S-94-24386 LBR
     BK-S-94-24387 LBR

     for Bentley and Fingarette:

     LA 94-49865 VZ
     LA 94-49863 VZ

(nishika2)

- 
    ... Sid (sidh@xxxxxxxxxxxx)


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