FTC Settlement Imposes $100,000 Fine Against Online Retailer for Failing to Post Required EnergyGuide Information for Appliances

An online appliance retailer has agreed to pay a $100,000 penalty to settle Federal Trade Commission charges that it failed to post required EnergyGuide information on its websites to inform consumers about the energy use of major home appliances it sells. In addition, the FTC has filed an administrative complaint seeking a penalty of $540,000 against another company for similar violations, after the company failed to respond to the FTC’s notice of proposed penalty.

The FTC charged that both companies violated the agency’s Appliance Labeling Rule, which helps consumers make informed buying decisions by requiring firms to provide energy use information for certain products such as refrigerators, freezers, dishwashers, air conditioners, water heaters, and washing machines.

In all, since November 2010, the FTC has taken legal action against five companies for allegedly violating the Appliance Labeling Rule. In addition to their online sales, the companies operate brick-and-mortar stores in New York, New Jersey, Connecticut, Illinois, and California. Last year, three of the retailers agreed to pay more than $400,000 in total penalties to settle charges that they violated the Rule.

The legal actions announced today pertain to the two retailers that did not agree to settle earlier. One of those companies, Universal Appliances, Kitchens, and Baths, Inc. has now agreed to pay a $100,000 penalty. The FTC is pursuing a $540,000 penalty in an administrative action against the other company, Universal Computers and Electronics, Inc., which has not responded to the FTC charges.

EnergyGuide information estimates the annual cost to operate an appliance. Under the Energy Policy and Conservation Act, the FTC may assess civil penalties against online retailers that fail to provide EnergyGuide information. The agency must first notify the non-settling companies of the proposed penalty amounts, which it did in these cases. The companies can then choose to pay the proposed penalty or be sued by the FTC in an administrative proceeding.
The Commission votes approving the complaints against both companies, as well as the consent order with Universal Appliances, Kitchens, and Baths, Inc., were 5-0.

NOTE: The Commission issues an administrative 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 respondent has actually violated the law. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge. A consent agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated.

Copies of the documents mentioned in this release are available on the FTC’s website at www.ftc.gov.The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  “Like” the FTC on Facebook and “follow” us on Twitter.

(FTC File Nos. 102-3040, Appliance Best Buys; and 102-3042, Universal Appliances, Kitchens, and Baths)
(Appliance Labeling 2.final)