FTC Accuses Photo Company of Violating Settlement : Dispute: The agency says Traditional Industries is not complying with a 1989 consent agreement stemming from complaints about sales practices.

Traditional Industries Inc., whose financial health has worsened significantly since the company ran afoul of the Federal Trade Commission a year ago, is in trouble with the agency again.

Traditional, based in Agoura Hills, sells packages of photographic equipment, photo developing and other services directly to consumers. They cost between $300 and $1,500, and are typically aimed at newlyweds and new parents. Most of its customers also buy the packages on installment credit provided by Traditional.

Last year, the FTC complained about certain Traditional sales practices and contended that the company made false claims about the quality of its photo enlargements and other services.

Traditional settled the dispute by, among other things, agreeing to let many of its customers cancel their contracts with the company, and by setting up a $250,000 trust fund to pay refunds to certain customers. Any money left in the fund was to be paid to the FTC.

But on Friday, the FTC accused Traditional of violating that settlement and asked a U.S. District Court in Seattle to issue an order finding Traditional and its subsidiaries in contempt.

The FTC claimed “Traditional continues to make misrepresentations about the quality and value of photographic packages it sells,” and has failed to let qualified customers cancel their contracts as required. Traditional also has failed to pay the FTC all of the unused portion of the $250,000 restitution fund, the agency contended.

Traditional has paid about $35,000 in refunds and $75,000 to the FTC, but the company still owes the remaining $140,000 of the fund to the FTC, said Charles Harwood, a spokesman for the agency’s Seattle office.

Richard Grace, Traditional’s executive vice president, said Monday that the company’s executives had not yet received the agency’s complaint and so had no immediate comment.

Should Traditional be found in contempt, it would have to cease collections from customers who have accepted the company’s cancellation offer but are still paying for Traditional’s products, send cancellation offers to customers who should have received them, and pay the rest of the refund money to the FTC, Harwood said.

The order also would mean that if Traditional did not comply within 10 days, it would be charged $10,000 a day for every day it is not in compliance, Harwood said.

The company’s dispute with the FTC already has been evident in Traditional’s financial results. After losing $2.72 million in its fiscal year that ended June 30, 1989, Traditional lost an additional $5.46 million in the nine months that ended March 31 of this year because of the increased cancellations, customers’ defaults and slower collections.

Traditional’s stock has also collapsed. It is now quoted at about 12 cents a share in over-the-counter trading, after climbing as high as $15 a share three years ago.