Settlements Will Bar Deceptive and Unsubstantiated Performance Claims; Dura Lube to Pay $2 Million in Consumer Redress
Additive marketers Dura Lube and Motor Up, and their principals, have agreed to settle Federal Trade Commission charges that performance claims for their engine treatments were deceptive and unsubstantiated in violation of federal law. The two proposed settlements will bar false and unsubstantiated claims about the performance, benefits, efficacy, or attributes of these products. In addition, Dura Lube will pay $2 million in consumer redress to be distributed by the FTC. The FTC has previously halted allegedly deceptive ads for Prolong Engine Treatment, Valvoline Engine Treatment, Slick 50 Engine Treatment and STP Engine Treatment.
"Consumers deserve advertising that is truthful and performance claims that are substantiated," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "The FTC intends to make sure they get it."
In FTC complaints issued against Motor Up on April 8, 1999 and Dura Lube on April 29, 1999, the agency alleged that the companies used false and unsubstantiated claims to promote their engine treatments. One administrative trial proceeded against Motor Up Corporation, its subsidiary Motor Up America, and their principal, Kyle Burns. Another went forward against Herman S. Howard, Scott Howard and six Dura Lube corporations they control. The proposed settlements announced today resolve those complaints and end the trial process.
The FTC alleged that both Dura Lube and Motor Up used labeling, packaging, infomercials, and other ads that represented, among other things, that compared to motor oil alone, their products reduce engine wear; extend engine life; and help prevent engine breakdowns or reduce the risk of serious engine damage when oil pressure is lost. The ads for both products also represented that they protect engines for up to 50,000 miles, according to the complaints. Motor Up ads also allegedly claimed that their product prevents engine corrosion, will not drain out from the engine even when the oil is changed, and protects against engine wear even without motor oil. Dura Lube ads allegedly claimed that their product reduces emissions and improves gas mileage by up to 35%. The FTC alleges that the companies did not possess or rely on competent and reliable evidence to substantiate any of their performance claims, and therefore the claims were deceptive.
Both Dura Lube and Motor Up ads showed tests and product demonstrations that they claimed "proved" the efficacy and superiority of their products. The FTC alleged that the tests did not prove the claims, and therefore the companies' assertions that they did were false.
Dura Lube ads featured a former NASA astronaut endorsing the product, allegedly representing that he had expertise in the evaluation of automobile engine lubrication and that he had endorsed Dura Lube on the basis of independent, objective and valid testing. The FTC alleged that the astronaut did not have that expertise and had not endorsed Dura Lube based on independent, objective or valid testing. In addition, the complaint contends Dura Lube falsely claimed that its product did not contain any chlorinated compound and that it had been tested by the Environmental Protection Agency.
The proposed settlements would bar Dura Lube and Motor Up and their principals from making any claims about the performance, benefits, efficacy, attributes or use of any automotive engine oil additive unless they possess competent and reliable evidence to support the claims. Both settlements also would bar misrepresentations about tests and the use of misleading or false demonstrations in connection with the marketing of any product for use in a motor vehicle.
The settlement with Dura Lube also would prohibit unsubstantiated performance claims for any product for use in a motor vehicle, and misleading or false demonstrations for any product. In addition, it would prohibit false claims that Dura Lube Engine Treatment contains no chlorinated compound or that it has been tested by the Environmental Protection Agency; and unsubstantiated claims that Dura Lube meets the requirements or standards of any government or standard-setting organization. It also would bar misrepresentations about the qualifications of product endorsers. The proposed settlement would require Dura Lube to notify product distributors in writing regarding the FTC complaint and order, visit distributors' facilities to replace Dura Lube labels and packaging with labels and packaging that comply with the order, and report to the FTC any distributor who disseminates Dura Lube claims in violation of the order. Finally, Dura Lube will pay $2 million in consumer redress.
The Motor Up settlement would prohibit unsubstantiated performance claims for any fuel treatment, motor oil, grease, transmission fluid, or brake fluid. Motor Up Corporation, Inc., is based in Philadelphia, Pennsylvania. Motor Up America, Inc., a wholly owned subsidiary, is based in Stuart, Florida. Kyle Burns is president of Motor Up Corporation.
In addition to Herman S. Howard and Scott Howard, of Stamford, Connecticut, the FTC complaint named Stamford-based Dura Lube Corporation, Howe Laboratories, Inc., The Media Group, Inc., and National Communications Corporation, all of which played a role in marketing Dura Lube Engine Treatment. Also named are American Direct Marketing, Inc., based in Nashville, Tennessee, which markets the product directly to consumers, and Crescent Marketing, Inc., d/b/a Crescent Manufacturing, Inc., headquartered in Eden, New York, which manufactures and packages Dura Lube.
The Commission votes to accept the proposed settlements were 5-0 . An announcement regarding the proposed consent agreements will be published in the Federal Register shortly. The agreements will be subject to public comment for 30 days, until April 28, 2000, after which the Commission will decide whether to make them final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
The FTC has produced a free consumer education brochure, "Gas Saving Products."
NOTE: Consent agreements are for settlement purposes only and do not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaints, consent agreements and the consumer education brochure 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; toll free at 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. D09291 - Motor Up)
(FTC File No. D09292 - Dura Lube)
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