Seller to Pay More Than $100,000 in Civil Penalties
An insulation seller will pay a $104,257 civil penalty to settle charges that it made false and misleading performance claims about its insulation product known as “The Barrier.” The settlement prohibits the company and owner from making false and misleading claims and violating the Federal Trade Commission’s R-value Rule.
The R-value is a measure of an insulation’s resistance to heat flow: the higher the R-value, the greater the insulating power. The FTC’s R-value Rule requires home insulation industry members to provide R-value information based on the results of standard tests. Using the required R-value information, consumers can improve the energy efficiency of their homes by purchasing the right amount of insulation. Misleading advertising about R-values hurts the ability of consumers to make informed purchasing decisions.
The FTC complaint alleged that advertising claims for “The Barrier” exaggerated its R-value by over 600 percent compared to test results and misrepresented other thermal performance characteristics of the insulation. The FTC also charged that labeling for “The Barrier” and Microfoil insulation did not mention the products’ R-values or explain the meaning of R-value, as required by law. The complaint also alleged other violations of the R-value Rule, including the publication of ads comparing “The Barrier” to competing products without disclosing the R-value for both products.
The settlement order, against Northwestern Ohio Foam Packaging, Inc., and its owner, Wally Radjenovic, imposes a civil penalty of $104,257. The order prohibits the company and its owner from making false and unsubstantiated claims about the R-value, K-value, thermal performance, energy costs, energy consumption, insulation qualities, or energy-related efficacy of any product. It also prohibits certain false claims related to the thermal conductivity of products. The defendants must provide R-value and other information required under the R-value Rule and are required to comply with the R-Value Rule.
The Commission vote to refer the complaint and proposed consent decree to the Department of Justice for filing was 5-0. The complaint and consent decree were filed on October 5, 2006 in the U.S. District Court for the Northern District of Ohio by the Department of Justice at the request of the FTC.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant actually has violated the law.
NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A consent decree is subject to court approval and has the force of law when signed by the judge.
Copies of the complaint and consent decree are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.
(FTC File No. 052-3192)
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