MODERN LIVING: Watch Your Step

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Like a chaperone at a high school prom, the Federal Trade Commission tapped Dancer Arthur Murray and his wife Kathryn on the shoulder last week, told them that some of their fast steps were out of line. The FTC objected particularly to the "misleading and deceptive" quizzes that it said the Murrays used to help build their $45 million-a-year business.

One often-used Murray promotion gimmick, said FTC, was to call people on the phone, give them a simple "quiz" such as: "Name two Presidents of the U.S. besides Eisenhower who were once generals." For the correct answer, the Arthur Murray studios handed out "$25 in free lessons." But all too often, said FTC, the lucky winner found that he had to buy a complete course to collect his prize. FTC also rapped the "Lucky Buck" contest ("Check your dollar bills. If any of the serial numbers contains a 5 and 0 you've got a winner"), and objected to high-pressure sales talks which it said "coerce" prospects into signing up for dance courses.

Besides FTC, a grand jury in St. Louis was also investigating Murray selling practices, turned up an instructive lesson in how much a "free course in dancing" can eventually cost. Mrs. Emma Frisch, a 60-year-old widow and part-time employee in a hat factory, testified that last year an Arthur Murray studio called her and told her she had won a free dance analysis.

At the studio, she got a quick sales pitch, signed up for a five-hour introductory course.

After that it was just one great bewildering whirl of salesmanship. She withdrew $7,300 of her savings to buy a lifetime course, put two mortgages on her home to buy the $9,000 gold medal course and then the $12,000 lifetime executive course. By mid-July she had paid out over $25,000, had a nervous breakdown from worry over paying the rest. What sales technique had been used on Mrs. Frisch? Just sheer flattery. Admitted her instructor: "She idolized flattery." In the past, when similar complaints have popped up, Arthur Murray has neatly danced aside, pointing to a clause in his licensing agreements which makes each of the 450 studios a separate entity for legal liability purposes. But this time the FTC contends that the same deceptive selling pattern is found throughout Murray's organization, holds him responsible.

In his Manhattan office, nibbling Muenster cheese to allay an ulcer's pang, 65-year-old Arthur Murray said that he does not think, at present, he will fight the FTC complaint. Said he: "People think the FTC is on their side, and we wouldn't want to turn the people against us." Anyway, he said, taking one step back, he has ordered most of the practices stopped.

They are no longer profitable.