Intermatic Inc. Agrees to Pay $250,000 Civil Penalty to Settle Charges of Violating 1979 FTC Order

Intermatic Incorporated, one of the country's largest manufacturers of consumer and industrial energy control products such as appliance timers and low-voltage outdoor lighting, has agreed to pay a $250,000 civil penalty to settle Federal Trade Commission charges that the company violated a 1979 order by making unsubstantiated energy savings claims about an electric water heater timer. The settlement would prohibit the company from making energy-savings, benefits, or performance claims for any of its appliance timing devices unless the company possesses competent and reliable scientific evidence to substantiate the claims.

The 1979 consent order with Intermatic prohibited the Spring Grove, Illinois-based company from making unsubstantiated claims that the use of its electric water heater timer (the "Little Gray Box") results in substantial savings on water heating bills. The order also required certain disclosures about the limited benefits of the timer. For example, the order required that Intermatic disclose in any advertisement or promotional, labeling, or packaging material for its water heater timer: "That dishwashers should be used during certain periods of the timer's cycle in order to operate properly." In addition, the order required that Intermatic s instructions or directions for use of its water heater timer tell consumers a "method for using a dishwasher in order to have hot water available at the maximum temperature."

The FTC's complaint alleges that Intermatic violated the 1979 order by making unsubstantiated energy-savings claims, omitting the required dishwasher disclosure on the package and in advertisements, and omitting the required disclosure on the instruction sheets for the Little Gray Box. The complaint also charges that Intermatic violated Section 5 of the FTC Act by making false or misleading energy savings claims, lacking substantiation for the alleged energy savings, and by making false or misleading claims that tests prove the energy savings.

The proposed consent decree settling the charges, in addition to requiring the $250,000 civil penalty, would prohibit the company from making any energy efficiency, efficacy, benefits, mechanism of action or performance claims about appliance timing devices unless it possesses and relies upon competent and reliable scientific evidence to support such claims. Further, the settlement would prohibit the company from misrepresenting the results of scientific tests in connection with any appliance timing device.

The complaint and proposed consent decree were filed on May 23, 2000 by the Department of Justice at the request of the FTC, in the U.S. District Court for the Northern District of Illinois, in Rockford, Illinois. The Commission vote to refer the complaint and consent decree to the Department of Justice for filing was 5-0.

NOTE: A consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees are subject to approval by the court and have 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; toll-free: 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.

(Civil Action No. 00C50178)
(FTC File No. C-2961)