FTC Fines Contractor $350,000 on Energy Claims

September 23, 2013 | from AdminBerenson No Comments

Edward Sumpolec, who conducted business under three separate names, was recently fined $350,000 by the Federal Trade Commission for allegedly making deceptive and unsubstantiated claims with regard to the insulation capabilities of the liquid coating and foil radiant barrier products that he sold.

According to the FTC, Sumpolec had promised to reduce roof temperatures by as much as 95 degrees and save up to 60 percent on energy bills. A video on YouTube for all to see (including the FTC) assures the viewer that Sumpolec’s products would create “the ultimate home” and create “comfort, security, luxury, quality, health, wealth …” as well as saving energy.

The FTC disagreed, finding that Sumpolec violated the FTC’s R-value rule requiring sellers to provide an accurate R-value (the measure of a material’s resistance to heat flow) for their products. The FTC also found that Sumpolec did not retain records of such claims for three years, as required by the FTC’s Rule, and sold home insulation to consumers without making informative fact sheets available to them.

Clients should take notice of Sumpolec’s troubles. While few are likely as egregious as Sumpolec, that offers little solace. “Green” products sell. We know that, but the FTC also knows that. In a world where you have to keep up with your competitors, it can be all too easy to convince yourself, or allow your marketing staff to convince you, that a few aggressive advertisements will boost sales with no downside. When you find yourself at that moment, remember Sumpolec and consider your alternatives.