The plaintiff, complaining of defendants, alleges and says: INTRODUCTION 1. This action is brought by the State of North Carolina to prohibit the defendants from engaging in deceptive commercial practices through the operation of their modeling agency and to obtain restitution pursuant to N.C.G.S. §§ 75-14 and -15.1. PARTIES 2. The plaintiff is the State of North Carolina, acting on relation of Roy Cooper, Attorney General, pursuant to authority granted by Chapters 75 and 114 of the General Statutes of North Carolina. 3. Defendant Face National Models & Talent, L.L.C (Face) is a North Carolina limited liability company which has its principal place of business at 1230 West Morehead Street, Suite 110, Charlotte, North Carolina 28208. Face operates as a modeling agency. 4. Defendant Jennifer Lynn Gill is a resident of North Carolina. Her home address is 15722 Polonius Court, Huntersville, North Carolina 28078. At all times relevant to this action Gill was, along with defendant Chad E. Johnson, an organizer of Face, and she is an owner and managing member of FACE. Defendant Gill, along with defendant Chad E. Johnson, manages and controls the operations of defendant Face. 5. Defendant Chad E. Johnson is a resident of North Carolina. His home address is 15722 Polonius Court, Huntersville, North Carolina 28078. At all times relevant to this action Johnson, was, along with defendant Gill, an organizer of Face. Defendant Johnson, along with defendant Gill, manages and controls the operations of defendant Face. FACTUAL ALLEGATIONS 6. On May 1, 2001, defendants Johnson and Gill filed papers with the North Carolina Secretary of State's office to organize Face as a limited liability company and began operations as a modeling agency. Prior to opening Face, defendant Johnson operated a modeling company in Georgia called Xtra Model Management, Inc. The State of Georgia sued defendant Johnson and his company for engaging in unfair or deceptive practices in connection with the operation of his modeling company, and defendant Johnson signed a judgment agreeing, among other things, never to engage in employment with, directing, or acting as an agent or consultant for a modeling or talent agency located in the state of Georgia. He further agreed to pay the State of Georgia $30,000 to be used as restitution and attorney fees. 7. After opening Face, defendants began soliciting models in selected cities throughout the United States. Prior to going to a particular city to recruit, defendants run advertisements on local radio stations and in newspapers informing consumers that defendants are searching for models in the area. The advertisements inform consumers who are interested in becoming models to come to a location, usually a local hotel, between certain hours. Defendants' advertisements state that they are looking for a variety of models, including children over the age or four, plus-size models, and hair models. 8. When consumers arrive at the hotel during the specified hours, defendants or their employees, representatives, agents, or independent contractors talk with the consumers individually and invite them to come back to the hotel that evening or the next day for a presentation about the company and how to become a model with the company. 9. When the consumers come for the second visit, defendants or their employees, representatives, agents, or independent contractors ask the potential models to walk like they are walking on a runway. Some consumers report being told they have "the look" and will make good models. 10. At the second visit, the consumers are usually instructed to call a telephone number the next day to see if they made "the cut" and have been selected to become a Face model. When the consumers call back the next day, sometimes they are told, "you've got it" which means they have been "selected." However, defendants do very little assessment of the applicants' qualities because the majority of the people make "the cut." The consumers are instructed to return to the hotel, usually that night, to meet with Face representatives. 11. When consumers return to the hotel after being selected, defendants or their employees, representatives, agents, or independent contractors tell consumers about the company and give consumers a representation contract to sign with Face. The contract is a non-exclusive agreement which does not bind consumers to use of Face exclusively. A true and accurate copy of a Face contract is attached to this Complaint as Exhibit 1 and is incorporated by reference. 12. During this meeting, defendants or their employees, representatives, agents, or independent contractors tell consumers that they need to have photographs made to use on composite cards, also called "comp cards." A comp card is a small card showing several different poses of the prospective model. Defendants represent that they use the comp cards to secure modeling jobs for the consumers. 13. Defendants or their employees, representatives, agents, or independent contractors tell consumers that they can choose any photographer they want to take pictures for the comp cards. However, defendants encourage consumers to use defendants' photographers by telling consumers they have engaged professional photographers, make-up artists, and hairstylists to prepare the models and take their pictures for the comp cards. Defendants represent that the people they recommend all have experience in taking pictures of high-fashion models and will know how to make Face customers look their best. Upon information and belief, the photographers, make-up artists, and hairstylists do not have the experience defendants represent. If the consumer decides to use Face's photographer, defendants give the consumer a contact to sign in which the consumer agrees to pay for the photographs. A true and accurate copy of a photo contract is attached to this Complaint as Exhibit 2 and is incorporated by reference. 14. The cost of the photo shoot session is almost $600, and the payments are generally made in three installments. The first installment of approximately $170 is due at the time the consumer signs the photography contract. 15. The second payment of more than $213 is due at the second session, which Face calls its "workshop" and which is held a few weeks later. At that session, defendants instruct the potential models on how to fill out their time cards, how to prepare for the photo shoot, and how to behave as a model. The majority of the time is spent instructing consumers on how to fill out a time sheet rather than giving them practical information on modeling. While instructing on how to complete time sheets, defendants intentionally use hypothetical amounts, such as $150 per hour, which are far more than models working for Face receive on a modeling job. For those who have received employment through Face, the average hourly rate is generally less than $15. 16. The third payment of more than $216 is due at the time of the photo shoot, and with that payment, consumers have paid Face almost $600 for the photo shoot. 17. The photo shoot is generally held at a hotel or motel which is of a lesser quality than the hotel where the initial meeting was held. The customers are told to come at a certain time only to find out that several other people have been assigned the same time. Some consumers have complained that there was only one room for them all to dress in at the same time and that there was very little privacy. They also complained that the photographers, makeup artists and hair stylists were not professional. 18. After the photo shoot, defendants instruct consumers to return in about six weeks to view the slides of their pictures. 19. When consumers return to view the proofs from their pictures, defendants give them a sheet which explains the costs of the comp cards. A true and accurate copy of the sheet is attached to this Affidavit as Exhibit 3 and is incorporated by reference. Defendants suggest that consumers purchase at least one hundred fifty (150) comp cards at a cost of $388.85, and that is marked as the "recommended amount" on the sheet. However, the sheet indicates that they should purchase two hundred (200) at a cost of $458.00 if they are a "serious model – some possible travel." The minimum purchase is fifty (50) cards at a cost of $227.50, which was marked "minimum – small exposure." Some models wanted to have their own comp cards made, but defendants told them that they would not have a chance of getting jobs if they did not let Face produce the comp cards. 20. Defendants send the film to a processor in Charlotte, North Carolina, who produces the comp cards. While most consumers place an order for at least one hundred fifty (150), Face has a standing order with the developer to produce only fifty (50). Of those, twenty- five (25) are sent to the consumer and Face keeps twenty-five (25). Face never has additional comp card made unless the consumer complains. Face's cost for the cards is approximately $0.75 per card so that the order of fifty (50) cards costs Face only about $37.50 total, even though most consumers had paid $388.85 for an order of one hundred fifty (150) cards. Only after a Face employee called the Consumer Protection Division of the Attorney General's Office to inform it about the deception concerning the number and prices of the comp cards did defendants begin to inform the consumers that they should only order fifty (50) comp cards. However, defendants still charged consumers $227.50 for the fifty (50) comp cards when defendants' cost was only $37.50 for the fifty (50) cards. Furthermore, defendants never told consumers from whom they had taken payment for one hundred fifty (150) cards or more that they had produced only fifty (50), nor did defendants refund any of these consumers their money for overpayment. 21. In their advertising and during the sales presentations at the introductory sessions, defendants lead consumers to believe that defendants find traditional modeling jobs in print and runway work for their clients at salaries in excess of $150 per hour. Upon information and belief, the jobs defendants actually find for Face customers are promotional jobs. The majority of these promotional jobs include handing out product samples at concerts and trade shows, earning the models no more than $15 per hour from which Face also deducts its commission. At that rate, a model would have to work about sixty-six (66) hours to recoup the almost $1,000 he or she paid Face for the photography session and the comp cards. Upon information and belief, few, if any, Face customers have worked enough hours to recoup the initial investment for photography and comp cards. 22. While defendants actively recruit models over the age of four, defendants are not able to place models under the age of eighteen. Some parents reported that Face representatives told them that Face had contracts with Toys-R-Us and other retailers who might use children in advertisements. Upon information and belief, Face has not had such contracts and has never placed a child under the age of sixteen in any modeling job, but Face never discloses this fact to the parents of the children. Some of the promotional jobs even require models to be over the age of twenty-one because they are handling out samples of cigarettes. 23. Some consumers have complained that the photography is not of the professional quality defendants claimed it would be. However, when Face received complaints of this nature, its staff was instructed to tell the consumers that this was the way the photographs were supposed to look and that the photographer was trying to achieve a certain "look." 24. While defendants tell consumers in the sessions that Face does not guarantee jobs for all of its models, consumers are misled as to how many jobs and the kinds of jobs Face is providing its customers as well as how much these jobs pay. By telling prospective customers that they "have it" or "have what Face is looking for" or "have the look," defendants or their employees, representatives, agents, or independent contractors imply to consumers that Face will be able to place them in jobs when in fact a small percentage of Face's clients are actually placed in jobs. Defendants or their employees, representatives, agents, or independent contractors have indicated at some of their meetings that Face has contracts with The Gap to provide models for their print advertising. Upon information belief, that was a misrepresentation because Face has not had a contract of this type and such comments were made to lead consumers to believe that Face could provide jobs it had no ability to provide. 25. While Face tells consumers during the sales presentation that some of their jobs are promotional modeling jobs, Face misleads the consumers as to the nature of these jobs by withholding the details of those promotional jobs. Most Face customers, at the time they pay Face to take pictures and produce comp cards, do not realize that the promotional work pays less than $15 per hour and that Face will not place them in enough jobs to recoup all of the money they pay Face for the photography shoot and comp cards. 26. Defendants or their employees, representatives, agents, or independent contractors also mislead consumers into believing that they must have comp cards made and must let Face get them printed. Most of the companies through which Face places promotional models do not even ask Face to provide them with comp cards because they do not care what the models look like. 27. Face's website at www.facemodels.com contains misrepresentations about the nature of its operation and the types of jobs it has found for its customers. In its Corporate Profile, in a section called "About Face," defendants represent: Our agency is renowned nationwide for developing modeling talent in the following fields: High Fashion, print, television, film, promotions, also children (4+), men, women, new FACES's, runway, plus sizes, petites, and lifestyle modes. However, defendants have not placed models in any of the categories above except the promotional modeling area. Furthermore, in a section called "Our Commitment," defendants represent: The booking staff includes individuals with Fortune 500 experience that have enabled us to have an immediate corporate presence. Leaders from the fashion world have also joined our booking staff, enabling FACE to develop relationships with large retailers and magazine houses. Upon information and belief, such statements are mischaracterizations of the background of Face's staff and its ability to find print work for models. 28. In a section of the Face website entitled "Frequently Asked Questions," one of the questions is, "How can promotional modeling jobs further my modeling career?" In the answer, defendants imply to consumers that promotional jobs will provide them a chance to be noticed by the companies they are working with. The answer includes the statement, "[m]any promotional models have gone on to work on travel teams and print ads for these clients." However, upon information and belief, many Face customers have not gone from doing promotional work to print or other type of modeling after working for Face on a promotional job. 29. Defendants sign up consumers as models without an effective screening process because defendants' intent is simply to sign up as many models as possible to maximize the amount of money they collect for the photography sessions and the comp cards. When they do not receive jobs, consumers report that they have attempted to call Face to ask when they may receive jobs. However, consumers complain that they are often unable to get through to the staff at the Face office in Charlotte. Some who have talked to the staff at the office in Charlotte complain that they were told to go market themselves with the comp cards they received from Face. At least one parent of a child who was signed up to be a Face model reported having been called about a year after signing up to see if she wanted to pay to have her child's pictures taken again because the child's appearance would have changed so much in a year. Since Face has been unable to place children in modeling jobs, having a new picture made would only have served to bring additional income to Face and not to assist the child in finding work. 30. Defendants do not presently have the ability to place models in any jobs other than very low-paying promotional work, if they are able to place them in jobs at all. While traditional modeling agencies make their money from commissions they receive when their models are placed in modeling jobs, the majority of Face's money is made from photography contracts and sale of the comp cards, which is the focus of their business. Even after representatives of the Attorney General's Office informed defendants it was deceptive to take money from children and their parents when Face could not find them jobs, defendants continued to sign up children for photography sessions and comp cards. 31. In 2001, representatives of the Consumer Protection Division of the Attorney General's Office informed defendants Gill and Johnson that Face should be licensed by the North Carolina Department of Labor as a Private Personnel Service as that business is defined in N.C.G.S. § 95-47.1(16). Under the provisions of N.C.G.S. § 95-47.2(d)(3)(b)(2), such a license may be denied, among other things, if the applicant was the owner of a similar business which "was caused to cease operation by action of any State or federal agency or court because of violations of law or regulation relating to deceptive or unfair practices in the conduct of business." Defendant Gill applied for the application as the owner of Face and did not disclose the fact that defendant Johnson had been sued by the State of Georgia for unfair or deceptive practices in the operation of a modeling agency in Georgia. A former employee of Face reported that defendant Johnson hired her to work for Face in 2001 and continued to be her supervisor at Face until she left her job in October 2002, which meant defendant Johnson continued to work in the business after Face received its license from the North Carolina Department of Labor despite defendant Gill's representation to the contrary. CLAIM FOR RELIEF VIOLATIONS OF CHAPTER 75-1.1. 32. Plaintiff realleges and incorporates herein the allegations in paragraphs 1 through 31. 33. During the solicitation and sale of modeling contracts to consumers in North Carolina and in other states, defendants have engaged in a continuing pattern of unfair and deceptive business practices through: (a) Representing directly or indirectly that Face could find jobs for its models in print and runway work at high hourly rates when the only jobs Face found were promotional work at low hourly rates; (b) Representing to consumers that they should have Face photographers take their pictures because the pictures would be of a better quality when such representations were unsubstantiated; (c) Representing to consumers that they needed to buy at least one hundred fifty (150) comp cards to maximize their exposure when Face was only having fifty (50) developed; (d) Representing to consumers that they had to have photographs taken and comp cards made for promotional work when the majority of the clients who used Face customers for promotional work did not ask Face to send them comp cards; (e) Misleading consumers into thinking that they have been selectively chosen for their qualities as a model when most of the people who came to defendants' initial sales presentation were "selected" to become models for Face; (f) Telling parents that Face could find their children jobs and entering into contracts with children when defendants knew that they had no jobs available for children; (g) Overstating the qualifications of Face's staff through misrepresentations made on the Face website; and (h) Representing that defendant Johnson was no longer involved in the operation of the business when, according to an employee, he was actively involved in the operation of the company. 34. Defendants' deceptive business operations as a modeling agency were in or affecting commerce in North Carolina. 35. All contracts entered into between defendants and consumers and all money received by defendants from consumers were obtained as a direct result of the defendants' deceptive practices. 36. Pursuant to N.C.G.S. § 75-14, the Attorney General has the right to seek injunctive relief to restrain defendants' violations of N.C.G.S. § 75-1.1. 37. Pursuant to N.C.G.S. § 75-15.1, the Attorney General has the right to seek and obtain cancellation of all contracts and the restoration of all moneys obtained by the defendants as a result of the defendants' violation of N.C.G.S. § 75-1.1. PRAYER FOR RELIEF WHEREFORE, the plaintiff prays the Court for the following relief: 1. That the Court issue a permanent injunction restraining the defendants, their agents, employees, and persons acting in concert with them from (a) operating as a Private Personnel Service without being licensed by the North Carolina Department of Labor; and (b) conducting a modeling or talent agency in which defendants provide services of photography and/or the production of comp cards in connection with the modeling or talent; and (c) operating a modeling agency in which the agency or any related entity receives money from consumers other than from commissions from modeling jobs. 2. That the Court declare all contracts entered into by the defendants in violation of the law to be void and order all amounts consumers have paid pursuant to such contracts to be refunded to consumers; 3. That costs and reasonable attorney's fees be awarded the Attorney General pursuant to N.C.G.S.§ 75-16.1; and 4. For such other relief as may be just and proper. Respectfully submitted this the ____ day of March, 2003. ROY COOPER Attorney General __________________________ Harriet F. Worley Assistant Attorney General N.C. Department of Justice Post Office Box 629 Raleigh, NC 27602 (919) 716-6000 hworley@mail.jus.state.nc.us STATE OF NORTH CAROLINA COUNTY OF WAKE VERIFICATION Patricia Jones, being first duly sworn, deposes and says: That I am a Consumer Protection Specialist employed by the North Carolina Department of Justice and that I am authorized to make this verification; that I have read the foregoing complaint; and that upon my information and belief the matters and things alleged therein are true. ______________________________ Patricia Jones Sworn to and subscribed before me this the _______ day of __________________________, 2002 _________________________________________________ Notary Public My Commission Expires: _____________________________ |
