instruction or educational service offered, or in any other material respect, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.2 False representations as to earnings.

The making of false, untrue, or deceptive statements or representations regarding actual or probable earnings or opportunities in any vocation, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.3 Misrepresentation as to opportunities.

The making of false, untrue, or deceptive statements or representations regarding the opportunities in any vocation or field of activity as a result of the completion of any given course of instruction or educational service, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.4 False representations as to student employment or school's connection with United States Government. The making of false, untrue, or deceptive statements or representations as to services to be rendered in connection with the securing or attempting to secure employment for students, or as to the influence or connection of any school or schools with any branch, department, or establishment of the United States Government, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.5 False promises as to employment or increased earnings.

The making of false, untrue, or deceptive promises or representations regarding a job or a raise in pay upon completing a certain course of instruction or portion thereof, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.6 Limited time offers.

Representing an offer to be limited as to time or otherwise when such is not the fact, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.7 Misrepresenting offers as "special."

Representing an offer as "special" when it is in fact a "regular" offer with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.8 Fictitious prices.

Offering courses of instruction at prices purported to be reduced from what are in fact marked-up or fictitious prices, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.9 Money-back agreements.

It is an unfair trade practice for any member of the industry to use, directly or indirectly, and so-called "money-back" guarantee, refund agreement or other similar guarantee, agreement or contract between school and student, which (a) is conditioned upon the student taking or passing, or having the opportunity to take or pass, a future Government or civil service examination or test, or any other form of future examination or test given by any organization not affiliated with the school; or (b) is conditioned upon the student being placed upon a Government or other eligible list; or (c) is conditioned upon the student securing or having the opportunity to secure employment within the field of training pursued; or (d) is conditioned upon any other contingency; and which has the capacity, tendency or effect of misleading or deceiving students or prospective students because of the text of such guarantee, agreement or contract, or because of the representations regarding the same, or because of the circumstances or other conditions of its use, or which otherwise involves deception, misrepresentation, bad faith, or the deceptive concealment of pertinent facts.

§ 116.10 Misleading scholarship offers.

Making offers of scholarships or partial scholarships in such manner as to mislead or deceive students or prospective students into the belief that such offers are bona fide, when they are in fact not bona fide, is an unfair trade practice. § 116.11 Misuse of word "free."

Representing any commodity or service as "free" when in fact such commodity or service is regularly included as part of the course of instruction or service, with the tendency or capacity to mislead

or deceive students, prospective students, the public, is an unfair trade practice. § 116.12 Defamation of competitors.

The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the character, nature, quality, value or scope of their courses of instruction or educational services, or in any other material respect, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.13 Deceptively advertising character and scope of institution.

The use of any name, title, or other designation, by way of advertising or otherwise, having the tendency or capacity to mislead or deceive students, prospective students, or the public as to the character of the institution, its courses of instruction, or its influence in obtaining employment for students, is an unfair trade practice.

116.14 Deception in issuance of diplomas, degrees, etc.

For any member of the industry to issue any certificate or diploma, or to confer any degree, which misrepresents the course of study or instruction covered or completed, or the accomplishments or standing of the student receiving such certificate, diploma, or degree, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.15 Falsely representing courses of study.

Falsely representing the character or scope of any course of instruction or service offered, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.16 Misrepresentation as to faculty, advisory board, instruction materials,

etc.

The making of false, untrue, or deceptive statements or representations, through advertising or otherwise, that a certain individual or individuals are bona fide members of the faculty of a school or are members of its advisory board or authors of its instruction mate

The false representation, through advertising or otherwise, that students are given personal instruction by the head of the institution or a department head thereof, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.18 Deceptive "Help Wanted" advertising.

The use of "Help Wanted" or other employment columns in newspapers or other publications to get in touch with prospective students in such manner as to mislead or deceive such prospective students into the belief that a job is offered is an unfair trade practice.

§ 116.19 Blind advertising.

The use of "blind" advertisement or sales literature to attract prospective students when such advertisements or literature fail to set forth that courses of instruction or other educational services are being offered, in such manner as to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.20

Deceptive language in general.

The use of misleading or deceptive language in any form, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.21 Misuse of word "guarantee."

The use of the word "guarantee" or other word or words of similar import in connection with "money-back” agreements, in such manner as to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.22 Simulation of legal documents.

In the collection of tuition fees, the use of papers simulating or counterfeiting court documents in such manner as to mislead or deceive students is an unfair trade practice.

§ 116.23 Photographic

tions.

misrepresenta

The use of a photograph, cut, engraving or illustration in catalogs, sales literature, or otherwise, in such manner as to convey a false impression as to the size, importance, or location of the offices occupied by a private home study school, or as to such school's equipment, with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice. § 116.24 Misuse of national emblems,

pictures of United States Capitol, and similar devices, connoting Government endorsement.

The use of pictures or illustrations of Uncle Sam, the National Capitol, or any pictures, illustrations, or devices of similar character, or the use of the name or title of any present or former Government official, activity, branch, department, or establishment of the Government, in such manner as to mislead or deceive students, prospective students, or the public into the erroneous belief that the institution or its instructors have official relationship or connection with the United States Government, or into the erroneous belief that the training or services offered has the approval or endorsement of the United States Government or any branch thereof, is an unfair trade practice.

§ 116.25 Misuse of words "not for profit."

Falsely representing, directly or indirectly, through advertising or otherwise, that a school is operated "not for profit", with the tendency or capacity to mislead or deceive students, prospective students, or the public, is an unfair trade practice.

§ 116.26 Unqualified students.

Willfully inducing the enrollment or retention of a student for any course of instruction or training for a job or position for which the student is manifestly unfit by reason of educational or permanent physical disqualification, or other material disqualification, is an unfair trade practice.

GROUP II

§ 116.101 "Money-back” agreements. "Money-back" agreements, so-called, or other similar contracts between school

It is the judgment of the industry that the sales representatives of all schools be selected primarily on a basis of ability and integrity and that each representative be given an adequate preliminary training and be bonded by an approved bonding company or by adequate personal sureties conditioned upon the faithful performance of his financial duties before being authorized to secure student enrollment.

§ 116.103 Dissemination of adequate information to prospective students.

It is the judgment of the industry that all schools should, at or prior to the time of enrollment for any course of study or service, provide each student enrolled therein with literature, by means of catalog, correspondence or other writing, clearly setting forth the nature, scope, number and character of lesson assignments and the terms upon which such course of study or service is sold.

§ 116.104 Precautions in avoidance of deceptive statements by sales repre

sentatives.

AUTHORITY: The provisions of this Part 117 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45.

SOURCE: The provisions of this Part 117 appear at 22 F.R. 2935, Apr. 26, 1957, unless otherwise noted.

§ 117.0 Definitions; the industry and its products.

(a) Products of this industry consist of equipment and supplies for schools, colleges, universities, and other educational institutions or organizations. Such products include, but are not limited to, pencils, paper, crayons, chalk, chalkboards, book covers, desks, chairs, addressing and duplicating machines, flags and banners, maps, laboratory and vocational equipment and supplies, building maintenance

It is an unfair trade practice to make or publish, or cause to be made or published, by way of advertising, labeling or otherwise, any statement or representation which, directly or by implication, has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers concerning the grade, quality, quantity, weight, use, size, material, ingredients, finish, character, origin, nature, design, condition, performance, durability, resistance to water or weather, manufacture, distribution, availability, or delivery dates, of any industry products, or in any other material respect.

§ 117.2 Misrepresentation as to character of business.

It is an unfair trade practice for any member of the industry to represent, directly or by implication, in his advertising or otherwise, that he is a producer or manufacturer of products of the industry, or that he owns or controls a factory making such products, when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business.

§ 117.3 Misrepresenting

as

products conforming to standard or specification.

In the sale, offering for sale, or distribution of any industry products, it is an unfair trade practice:

(a) To falsely represent or imply that any industry product conforms to the requirements of any standard or specification, whether established or recognized by a department or unit of a city or state government, or of the Federal Government, by trade practice, or otherwise;

or

(b) To claim or imply that any industry product conforms to any standard or specification which is inapplicable or which has been rescinded, revised, superseded, or amended, and

thereby mislead or deceive purchasers or prospective purchasers; or

(c) To represent or imply that any industry product conforms to the requirements of any standard or specification without clearly disclosing the identity of the standard or specification to which reference is made. Such disclosure shall be by reference to the standard or specification on all labels, invoices, sales literature, and other advertising containing such representation or implication.

§ 117.4 Deceptive pricing.

(a) It is an unfair trade practice for any member of the industry to represent, in advertising or otherwise, that the price of any industry product has been reduced from what is in fact a fictitious price, or that such price is a reduced or a special price when it is in fact the regular selling price of such product, or that the regular price thereof is higher when such is not the fact, or otherwise to falsely or deceptively represent the past or current price of an industry product.

(b) It is an unfair trade practice for any member of the industry, directly or indirectly, to use or to supply to dealers, or to aid or assist in the use of, price tags, labels, or similar devices which are false or fictitious, or which such member has reason to believe are intended to be used or will be used by dealers or salesmen for the purpose of misleading or deceiving the purchasing or consuming public in regard to price, or in any other material respect.

§ 117.5

Guarantees, warranties, etc.

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member:

(a) To represent, directly or by implication, that any industry product is guaranteed or warranted unless the nature and extent of the guarantee or warranty, and the manner in which the guarantor or warrantor will perform thereunder, are clearly and conspicuously disclosed; or

(h) To use, or cause to be used, any guarantee or warranty which does not clearly and conspicuously disclose the terms, conditions, and limitations of such guarantee or warranty and the obligations of the guarantor or warrantor thereunder; and

(c) To represent or imply that an industry product is guaranteed or warranted, or to use any guarantee or warranty covering an industry product, when the guarantor or warrantor fails or refuses to observe his obligations thereunder.

§ 117.6 Substitution of products.

It is an unfair trade practice for a member of the industry to make an unauthorized substitution of products, where such substitution has the capacity and tendency or effect of misleading or deceiving purchasers, by:

(a) Shipping or delivering industry products which do not conform to samples submitted, to specifications (in bids or otherwise) upon which the sale is consummated, or to representations made prior to securing the order, without advising the purchaser of the substitution and obtaining his consent thereto prior to making shipment or delivery;

or

(b) Falsely representing the reason for making a substitution.

NOTE: Nothing in this section shall be construed as preventing the application of such tolerances as are agreed upon between buyer and seller or are otherwise deemed reasonable and proper and where no misrepresentation or deception of purchasers is practiced or promoted in relation to the product or its deviation from samples or specifications.

§ 117.7 Deceptive use of trade or corporate names, trade-marks, etc.

It is an unfair trade practice for any member of the industry to use any trade name, corporate name, trade-mark, or other trade designation, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the name, nature, or origin of any product of the industry, or of any material used therein, or which is false, deceptive, or misleading in any other material respect.

§ 117.8 Passing off through imitation or simulation of trade-marks, trade names, etc.

It is an unfair trade practice for any member of the industry to mislead or deceive purchasers by passing off the products of one industry member as and for those of another through the imitation or simulation of trade-marks, trade names, brands, or labels.