9723063 UNITED STATES OF AMERICA In the Matter of GENERAL SIGNAL POWER SYSTEMS, INC., a corporation. DOCKET NO. C-3860 COMPLAINT The Federal Trade Commission, having reason to believe that General Signal Power Systems, Inc., a corporation ("respondent"), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges: 1. Respondent General Signal Power Systems, Inc., is a Wisconsin corporation with its principal office or place of business at N. 9246 Highway 80, Necedah, Wisconsin 54646. 2. Respondent, through its division, Best Power, has manufactured, advertised, labeled, offered for sale, sold, and distributed computer products to the public, including the "Patriot" and "Fortress" uninterruptible power systems. Uninterruptible power systems are devices that protect consumer appliances, such as personal computers, from damage resulting from power disturbances or power failures. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act. 4. Respondent has disseminated or has caused to be disseminated advertisements for Patriot uninterruptible power systems and Fortress uninterruptible power systems, including but not necessarily limited to the attached Exhibits A through D. These advertisements contain the following statements and depictions:
5. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that:
6. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that it possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made. 7. In truth and in fact, respondent did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 5, at the time the representations were made. Therefore, the representation set forth in Paragraph 6 was, and is, false or misleading. 8. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that a five-year power quality study conducted by Best Power's National Power Laboratory showed that the number of calls for computer service dropped 82% after installation of a UPS. 9. In truth and in fact, a five-year power quality study conducted by Best Power's National Power Laboratory did not show that the number of calls for computer service dropped 82% after installation of a UPS. Rather, the 82% figure cited in the advertisements was taken from a one-time customer survey. Therefore, the representation set forth in Paragraph 8 was, and is, false or misleading. 10. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that competent and reliable studies or surveys show that the number of calls for computer service dropped 82% after installation of an uninterruptible power source. 11. In truth and in fact, competent and reliable studies or surveys do not show that the number of calls for computer service dropped 82% after installation of an uninterruptible power source. For example, the consumer survey from which the 82% figure was taken only considered purchasers of UPSs that feature a ferroresonant transformer, which provides a much higher degree of protection from power disturbances than do the Patriot or Fortress model featured in the advertisements. Therefore, the representation set forth in Paragraph 10 was, and is, false or misleading. 12. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. THEREFORE, the Federal Trade Commission this eleventh day of March, 1999, has issued this complaint against respondent.
By the Commission. Donald S. Clark SEAL: |