Agency Cites FTC Order Violations
The Federal Trade Commission has asked a U. S. District Court to permanently halt the deceptive claims of an aftermarket brake marketer, to award civil penalties for violations of an earlier FTC order barring the claims, and to order consumer redress. Violations of FTC orders carry a civil penalty of up to $11,000, per violation. The suit was filed by the U.S. Department of Justice at the FTC's request.
The suit names Ed F. Jones, his son, Larry Jones, Brake Guard Products, Inc., Brake Guard Limited Liability Company of Nevada, and Brake Guard Limited Liability Company of Washington. Ed Jones is the principal of the three companies (collectively referred to as "Brake Guard.") Larry Jones has exclusive distribution rights in the United States, has set up a distributor network and makes sales presentations in seminars throughout the country.
In 1995, the FTC alleged that Ed Jones and Brake Guard made false and unsubstantiated advertising claims that the Brake Guard Safety System, also known as Advanced Braking System or Brake Guard ABS, is an antilock braking system as effective as manufacturer-installed ABS brakes; complies with a performance standard established by the Society for Automotive Engineers; and will qualify a vehicle for automobile insurance discounts in a significant proportion of cases. The Commission alleged that the false and unsubstantiated claims violated federal law. Administrative Law Judge Lewis F. Parker upheld the charges in a May 1997 decision, following trial. Brake Guard and Ed Jones appealed Judge Parker's decision to the full Commission, which upheld Judge Parker's opinion.
The Commission order, which became effective March 30, 1998, barred the respondents, their agents, representatives and those in active concert from representing that Brake Guard Safety
System, Advanced Braking System, Brake Guard ABS or any substantially similar product:
- is an antilock braking system;
- prevents or substantially reduces wheel lock-up, skidding, or loss of steering control in emergency stopping situations;
- will qualify a vehicle for an automobile insurance discount in a significant proportion of cases;
- complies with a performance standard pertaining to antilock braking systems set forth by the National Highway Traffic Safety Administration;
- reduces stopping distances by 20 to 30 percent;
- provides antilock braking system benefits that are at least equivalent to factory- installed ABS systems; or
- will stop a vehicle in a shorter distance than a vehicle that is not equipped with the product, in emergency stopping situations.
The order issued by the Commission also required Brake Guard and Ed Jones to have substantiation for any claims of enhanced safety from the use of any braking system, accessory, or device, or any other system, accessory, or device designed to be used in, on, or in conjunction with any motor vehicle; claims of insurance discounts as a result of installation of the brakes; and bars misrepresentations of endorsements.
The order required that Ed Jones send a letter to all Brake Guard distributors notifying them that the FTC determined that the ad claims for Brake Guard are false and misleading and instructing them to stop using the promotional material. In addition, Ed Jones was required to send consumers notification of the FTC findings.
In the suit filed in U. S. District Court today, the FTC alleges that since March 30, 1998 the defendants have been marketing Brake Guard products primarily to the recreational vehicle market through a network of distributors and in seminars. The complaint charges that advertising and promotional material, packaging, brochures, flyers, promotional videos and an Internet web site, contain claims that violate the FTC's 1998 order.
The FTC has asked the court to enjoin the defendants from violating the agency's order; award the agency civil penalties for violations of its order; bar the defendants from engaging in, or assisting others engaged in, violations of the FTC Act; and order consumer redress.
The Commission vote to file the complaint was 5-0. It was filed at the FTC's request by the Department of Justice in U.S. District Court for the Western District of Washington, in Seattle on May 11, 2001.
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. The case will be decided by the court.
Copies of the complaint 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, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357). The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
James Reilly Dolan
Bureau of Consumer Protection
(FTC File No. 9277)
(Civil Action No. CO1-686P)
Office of Public Affairs