The straight-laced Federal Trade Commission has wrapped a plain brown wrapper around its consumer fraud investigation of a mail order company specializing in sexually oriented merchandise.
The commissioners overruled a recommendation from the FTC's New York regional office to pursue an investigation against a company called Pleasure Chest, which sold its products at parties in private homes organized by the residents. The company was accused of failing to deliver orders that had been paid for.
"The guffaw factor was too high," said one FTC aide. "We would be the absolute laughing stock of the entire town," added another.
The issue is a sensitive one around the FTC, which already has an image problem. Commissioner Patricia P. Bailey reportedly was annoyed that the FTC would use its scarce resources to investigate complaints about non-delivery of unconventional lingerie and sexually oriented merchandise while easing its enforcement of more serious consumer issues such as disclosure of nutritional content of foods and used-car and auto-defect frauds.
Because of the nature of some of the products involved in the case, one FTC official suggested softening the image problem by labeling it an investigation into consumer fraud on lingerie sales.
Officially, the FTC would say little except that the investigation remains open until Pleasure Chest fulfills its promise to the New York office to deliver all the back orders.
Duane Colglazer, Pleasure Chest's owner, acknowledged last night that his New York-based company had been unable to fill about 15,000 orders, but said it is working to send the merchandise out. In addition, money received from 300 parties whose orders have not been touched will be returned, Colglazer said.
"We became too successful. We were overwhelmed with orders. We lost track of the whole thing," he explained. As a result, Colglazer said the company called a halt last September to the parties, although some representatives in states such as Minnesota and Alaska kept sending in orders.
"We ended up with business we didn't want to do," he said.
It was unclear how many complaints had been received by the FTC, although an official said the number of complaints shouldn't be the main determinant for whether to open an investigation, because many people may be too embarrassed to admit they had lost money buying sexual paraphernalia.
The company operates about eight retail outlets, including one in Georgetown, and offers catalogue sales in close to two dozen states.