Division of Enforcement Bureau of Consumer Protection	United States of America Federal Trade Commission Washington, D.C. 20580
	October 19, 2001

Ms. Jane Doe
General Store Manager
Appliance Stores, Inc.
123 Main Street
Anywhere, XY 00000

Dear Ms. Doe:

The staff of the Federal Trade Commission (FTC) recently inspected about 150 appliance showrooms, including your store, to determine whether retailers are complying with the FTC's Appliance Labeling Rule, 16 C.F.R. Part 305. The Rule requires EnergyGuide labels on all new refrigerators, freezers, dishwashers, clothes washers, water heaters, central and room air conditioners, heat pumps, furnaces, pool heaters, and boilers. The Rule helps consumers make informed purchases of major appliances and promotes energy conservation, which is particularly important in these times of increasing energy costs and tight supplies.

Through our inspections of over 14,000 appliances, we found that many appliances covered by the FTC's Rule did not have EnergyGuide labels displayed in a way that allowed consumers to read them easily. In many cases, the labels were missing altogether. In other cases, the labels had been removed and reapplied to inaccessible areas of the appliance, or were covered up by other labels or signs. In your store, labels were missing from a significant number of the appliances on display.

Under the Appliance Labeling Rule, it is the manufacturer's responsibility to place EnergyGuide labels on appliances covered by the Rule. After the product is shipped to stores, the Rule makes it unlawful for retailers "knowingly to remove or render illegible" any EnergyGuide label. 16 C.F.R. § 305.4(a)(2). To ensure compliance with the Rule, we recommend that retailers:

1. Train store personnel so they understand that it is a violation of federal law for retailers to remove, cover up, or deface EnergyGuide labels; and   2. Make sure that EnergyGuide labels are plainly visible and readable for appliances displayed in retail showrooms (e.g., appliances should not be so close together that the labels on the sides of units cannot be seen and promotional materials should not cover up the labels).

We urge you promptly to take all necessary steps to ensure that your store complies with the Appliance Labeling Rule. Retailers that violate the Rule are subject to financial penalties of up to $110 for each label that is removed or rendered illegible.

More information about the Appliance Labeling Rule is available at the FTC's website, www.ftc.gov/appliances. If you have any questions, please contact Hampton Newsome, Attorney, FTC, Bureau of Consumer Protection, Division of Enforcement, 600 Pennsylvania Ave. NW, Room S-4611, Washington, DC 20580, telephone (202) 326-2889.

Sincerely,

Elaine D. Kolish
Associate Director for Enforcement