FTC Warns Internet Marketers about Making Misleading Claims about the Benefits of Gas-Saving and Other Energy-Related Devices

As gas prices creep higher and higher heading into travel season, the Federal Trade Commission recently conducted an Internet surf to detect and deter the deceptive marketing of products that purportedly save energy. After the surf, the FTC staff sent warning letters to more than 50 companies making questionable gas-saving and other energy-related advertising claims. While most of the warnings were targeted at marketers of automotive gadgets and additives, additional warnings addressed Internet marketers of purported energy-saving products for the home. The letters reminded the advertisers that they need scientific substantiation for their energy-saving claims and provided them with additional advertising guidance.

The warnings advised that the recipients may be subject to law enforcement action if they make deceptive claims in the future. "Our message to industry is that false or inflated energy-saving claims will not be tolerated. Our message to consumers is that they should be skeptical of dramatic fuel-savings claims for automotive and other products," said J. Howard Beales, III, Director of the FTC's Bureau of Consumer Protection.

The warning letters involved the following types of products:

• Fuel-Saving Automotive Devices and Additives: Numerous Web sites make implausible claims for various aftermarket automotive devices (fuel-line magnets, air bleed devices, and other retrofit gadgets) and additives that supposedly increase gas mileage (and sometimes reduce emissions) for automobiles. For example, FTC staff found claims such as "saves thousands of dollars on gas!" or "increased mileage up to 300%." The staff's experience with these products suggests that many of these claims are either false or grossly exaggerated. In addition, the Environmental Protection Agency (EPA) has evaluated or tested more than 100 purported gas-saving devices and additives, and has not found any product that significantly improves gas mileage.
   
• Instantaneous Water Heaters & Home Water Purification (or Softening) Systems: Some distributors are making exaggerated claims about the performance and the energy savings associated with instantaneous ("tankless") water heaters and home water purification or softening systems (e.g., "save 50% on hot water costs"). The Commission previously challenged similar claims for water purification systems.
   
• Transient Voltage Surge Suppressors: Although these products can protect equipment from power surges, in the past the Commission and the states have challenged claims that these products provide significant savings for consumers' energy bills.

The Internet surf and warning letters are part of the FTC's continuing law enforcement efforts to combat deceptive energy-saving claims. Late last month, the Commission approved a consent order with Kryton Coatings International and Procraft, Inc., which claimed that their "liquid siding" provides insulation equivalent to seven inches of fiberglass batting and R-20, and reduces utility bills up to 40 percent. In November 2001, the Commission obtained a consent decree resolving charges that Esrim Ve Sheva Holding Corp. (Gadget Universe) and its CEO made false and unsubstantiated claims for Super FuelMAX, an automotive fuel-line magnet (e.g., "A certified EPA laboratory reports an amazing 27% in increased mileage and 42% reduction in harmful pollutants").

The FTC cautions consumers to be wary of drastic energy-saving claims. The FTC has issued several consumer education brochures on topics such as purported fuel-saving automotive devices (Gas-Saving Products: Facts or Fuelishness?), gas-saving tips (Good, Better, Best: How to Improve Gas Mileage), and guidance for heating and cooling homes (Weathering the High Cost of Heating Your Home and Cooling Your Home: Don't Sweat It, among other publications). The FTC also has a dedicated energy & environment Web page: http://www.ftc.gov/bcp/conline/edcams/eande/index.html which links to these materials, as well as other energy efficiency information for consumers and businesses.

Details about EPA's motor vehicle aftermarket retrofit device evaluation program and related consumer information are available at: http://www.epa.gov/otaq/consumer.htm.

Copies of the documents related to the FTC's law enforcement actions, and consumer and business education materials, 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), 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.