Aftermarket Brake Marketer Settles FTC Charges

A primary distributor of the Brake Guard aftermarket braking device has agreed to settle Federal Trade Commission and Department of Justice (DOJ) charges that he made false and unsubstantiated safety and performance claims for the product. The settlement with Larry Jones bars false and unsubstantiated performance claims for aftermarket braking products and contains a $100,000 civil penalty for violations of an earlier FTC order barring those claims. The civil penalty has been suspended in its entirety.

In 1995, the FTC charged that Brake Guard and its owner, Ed Jones, 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. 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 its principal appealed Judge Parker’s decision to the full Commission, which upheld his opinion.

The Commission order, which became effective March 30, 1998, barred the respondents and their agents and representatives from representing that the 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.

In May 2001, the DOJ, at the FTC’s request, filed suit in U.S. District Court in Seattle, Washington, against the Brake Guard companies, Ed Jones, and Larry Jones, who has set up a distributor network and makes sales presentations in seminars throughout the country. The complaint alleges that the defendants were marketing Brake Guard products primarily to the recreational vehicle (RV) market through distributors and in seminars. The complaint alleged that their promotional materials, including an Internet Web site, contained claims that violated the FTC’s 1998 order.

DOJ and the FTC asked the court to enjoin the defendants from violating the agency’s order; impose civil penalties for violations of the agency’s order; bar the defendants from engaging in, or assisting others engaged in, violations of the FTC Act; and order consumer redress. Ed Jones died shortly after the complaint was filed. The court entered a default judgment against Brake Guard Products, Inc., Brake Guard Limited Liability Company of Nevada, Brake Guard Limited Liability Company of Washington, and Kimberly Bennett, in her capacity as representative of the estate of the late Ed Jones, on July 31, 2002.

The settlement, which was filed with the court for its approval on July 7, 2003, ends the litigation. The settlement bars Larry Jones, his agents, representatives, and those acting in concert with him from making false or unsubstantiated claims about any aftermarket braking product and requires that he has substantiation for any claims for braking devices. The settlement requires him to serve his distributors with a summary of the order and to take reasonable steps to ensure they comply with the order. The settlement also contains bookkeeping and record keeping requirements to allow the Commission to monitor compliance with its order.

NOTE: The consent agreement becomes final upon the court’s approval. A consent agreement is for settlement purposes only and does not constitute an admission of a law violation.

Copies of the legal documents associated with this case 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.

(FTC File No. X01 0050)