FTC Sends Warning Letters to Appliance Retailers

After inspecting more than 14,000 appliances in 144 showrooms at various locations throughout the country to determine whether the yellow-and-black EnergyGuide labels were properly displayed, the Federal Trade Commission staff has issued warning notices to 70 retailers to advise them of their obligations and of the potential penalties for violating the Appliance Labeling Rule. The Rule requires manufacturers to attach the labels to most major home appliances.

The EnergyGuide labels provide consumers with important information about the energy use or efficiency of appliances, and help them choose appliances that use less electricity or gas and therefore cost less to operate. The Rule prohibits retailers from removing the labels, obscuring them with other materials, or otherwise rendering the labels illegible. Retailers who remove or cover up EnergyGuide labels may be subject to penalties of up to $110 per unit.

"In this era of rising energy costs, it is more important than ever that consumers receive the information they need to save energy," said J. Howard Beales, III, Director of the FTC's Bureau of Consumer Protection. "The EnergyGuide labels allow consumers to compare the energy use or efficiency of appliances while they are shopping in stores or online. This gives them immediate information they can use to save money on their energy bills."

To ensure compliance with the Rule, the FTC's warning letter recommends that retailers:

• 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
• Make sure that EnergyGuide labels are plainly visible and readable for appliances displayed in their 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).

The Rule requires that EnergyGuide labels appear on the following appliances:

• refrigerators, freezers, dishwashers, clothes washers, and room air conditioners;
• water heaters, furnaces, and boilers;
• central air conditioners and heat pumps; and
• pool heaters.

In the fall of 2000, the FTC sent similar warning letters to online appliance dealers. Online dealers and other catalog sellers are required to provide consumers with information about the energy consumption or efficiency of covered appliances that are sold online. The FTC's Appliance Labeling Rule also requires light bulb manufacturers to provide information on packages to help consumers choose the most energy-efficient bulbs for their needs. The FTC is reviewing the packaging of compact fluorescent light bulbs to ensure that manufacturers comply with these requirements.

Copies of the Appliance Labeling Rule are available from the FTC's web site athttp://www.ftc.gov/appliances 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), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.