Guest Blog: Weighing in on FTC Decision

February 23rd, 2012 by DWM Magazine

Yesterday, the Federal Trade Commission announced cases against five window companies in their efforts “to ensure that environmental marketing is truthful and based on solid scientific evidence.” As I read the FTC documents, I realize it’s going to take me far longer than the 24 hours that I’ve had them to completely understand the ramifications of the Commission action. Heck, I think I’ll be lucky if I figure it out in 24 days! With 20-plus documents to digest, plus plenty of questions to follow up on it’s going to take a while. So here are my first impressions:

First off, I’m not particularly surprised. The FTC Green Guides, core concepts of substantiation AND specificity go hand in hand. In many of case examples, specific energy performance was cited but it wasn’t specific enough – the marketing lacked the exact conditions needed to obtain the cited result. Granted, the companies were optimistic about the performance and they said so. But it appears that it wasn’t perceived as optimistic – it was perceived as typical.

My take away? If you’ve got “Up to…” and “conditions may vary” in your current marketing, it might be a good idea to rethink those messages. “If their marketing materials contain these representations, it behooves them to immediately confirm that they aren’t based on exaggerated or unsupported claims about energy efficiency or cost savings,” says Leah Rochwarg, attorney with the Green Marketing Compliance Team at Seyfarth Shaw in Boston. “Such claims should not be misleading.  They must be accurate and supported by competent and reliable scientific evidence that all or almost all consumers are likely to achieve the maximum savings claimed.”

Second, I’m completely stunned that Gorell, winner of seven straight ENERGY STAR® Partner of the Year Award, was named. When you think Gorell, you don’t think crappy. In fact, neither does the FTC. “We’re not claiming these are bad windows,” James Kohm, associate director of the enforcement division in the Bureau of Consumer Protection told the Blog of Legal Times. “They just overstated the energy savings.”

My take away? It’s as much about what you say, as HOW you’re saying it. It doesn’t matter how much technical back up you have, if you’re not using it properly and in the right location, it’s like not having it at all.

Third, I’ve long thought that users of the information are also at risk. Long Fence doesn’t manufacture windows – Serious does for them under the Long Window brand. Like the Tested Green case, the Serious complaint alleged that they “caused the dissemination of advertising and promotional materials.” What’s different this time? And what does it mean for builders who use these products?

My take away? Be careful of portraying someone else’s data as your own, unless you can stand behind it. “In this case it was the manufacturers who were making the claims of energy savings. Builders would not be liable for the manufacturer’s claims, unless the builders were restating the claims in their own marketing materials,” says David Crump, director of Legal Research at the National Association of Home Builders in Washington, D.C. “Builders are at risk if they assert the manufacturer’s marketing claim as a claim of their own.”

Lastly, these cases are not settled yet. There is a comment period, open until March 23. I’m not completely sure what comments could be submitted that would change any of these but the opportunity is there.

My take away? There is more information to be gained, more questions to be asked, more to be learned.  “The exact impact of these cases on any one company is a very complex legal question,” says Paul Savage, an attorney and LEED AP in Coral Gables.  “These cases show that the FTC is serious and active about its enforcement mandate and companies should be monitoring these developments closely and consider carefully the marketing claims that they are making.”

And it still might change. While, possession is 9/10ths of the law, PERCEPTION is apparently really what matters.

Arlene Stewart is president at AZS Consulting Inc., whose new project www.labtoad.com is an information clearinghouse for compliance with green marketing regulations. She will serve as a presenter at Fenestration Day on April 12 in San Antonio, and one of the things she will talk about is what to watch for when it comes to making green claims. For more on her sessions as well as the full seminar line up, visit the website for the event, which is sponsored by DWM magazine.

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6 comments
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  1. Yes, Arlene, you are absolutely correct in the “up to” aspect of the promises. I pointed this out in my comment earlier today about this. It’s a ploy as old as dirt, but does in no way excuse the players from making misleading promises. We, as an industry have come a long way from the “Tin Men” days of the 1950s and every headline like this moves us decades back in the mind of the consumer. Secondly, don’t confuse “crappy” (your term) with disingenuous. The statements are not a testament to the quality of the product, but to the quality of the people making the claims. Vic DeZen designed Gorrell’s window line to meet certain performance criteria. He spent, I’m certain, hundreds of thousands of dollars in design and extrusion tooling. The quality of his product design speaks for itself. The shame of it is, it was a lily that didn’t need gilding. The fact that Gorrell was an Energy Star Partner of the Year seven years in a row is, in my estimation, more of a comment on the fact that EPA is more focused on marketing their brand then they are in ensuring only the best of the best bear the Energy Star certification. How else could you explain the fact that about 80% of window products currently offered qualify for Energy Star, or the fact that the EPA last year awarded the Energy Star certification to a gasoline powered alarm clock?

  2. Mr. Maynes, thanks for the comment. I hope you won’t mind if I respond further.

    Just to be clear, in no way shape or form do I believe that Gorrell or Serious produce crappy windows. Since we’re talking about deceptive messages, I was merely voicing a conclusion (albeit erroneous) that many people may jump to, if they are not truly informed about what the FTC action is all about.

    I think the same can be said of the ENERGY STAR label. How would I explain that 80% of window products meet ENERGY STAR criteria? I would say that our industry deserves cudos for recognizing a target and rising to it. I would also say, it’s about time that a government program was crafted well enough to truly have that high a success rate. And last, if there has been one thing that has been drilled into my head by all the manufacturers I’ve been hanging around with, you can’t turn a battleship in less than 5 miles. You can’t constantly change criteria – it cost design $$ and advertising $$. And then just when you about to recoup those investments – whoops, the target changes? There is nothing wrong with enjoying success for a little while.

    I would also say our government has no business making a statement about the quality of products. That’s for the marketplace to decide. Sure, quantify target threshold and if you pass it great, if you don’t, c’est la vie. The quality of both products may be great – they also may be crappy. If the gas powered clock is a really efficient clock, then let it be recognized a really efficient clock compared to the inefficient one. The qualitative judgements just shouldn’t be in the discussion.. .

  3. @Robert Maynes – I agree with your comments. The over-the-top promises of a few make our whole industry look bad.
    Also, thanks for the reminder about the gasoline powered alarm clock! If you’ve never seen it, this article includes a photo: http://bit.ly/yOPYOI

  4. While you make some very good points, I think you’re not seeing the whole picture… for example, you would seriously put an internal combustion engine in your home in place of an electrically powered alarm clock? Would you not be concerned with, oh, I don’t know… carbon monoxide among other things? This is not a qualitative judgement on my part, it’s just plain common sense, something that seems to be in short supply in Washington, and especially at the EPA.

    Now, in defense of the EPA, they have made it abundantely clear for several years that future Energy Star qualifiers (at least as it concerns windows) will have to show marked improvements over today’s performance, as well it should. After all, Energy Star is supposed to be a rating of the top tier, not virtually every window out there. It’s been the push back from the “big battleships” who simply don’t want to comply, and would rather see the program watered down than provide a real quanitative benefit to the consumer.

    I’m all for letting the market decide, and that is what the original post addressed. The reason that the NFRC is in existence today is because we, as an industry, felt it was in the industry’s best interest to all be speaking the same language, testing to the same methods and providing a level playing field in order to allow consumers to make an informed choice. Playing fast and loose with performance claims is one of the things NFRC was supposed to prevent.

  5. Mr. Maynes,

    You warm the cockles of my heart – there is nothing I love more than a good debate that is also civil. It helps me consider different points of view, come up with new ideas, solve problems. So please take my responses in that vein, not that I’ve got to have the last word.

    I’m of two minds about regulating good ideas. On one hand, it makes sense, we are supposed to be progressive. On the other hand, to quote Ron White, “you can’t fix stupid.” There is no way we have enough dollars around to prevent stupidity. Of course, there is also the whole “what side of the elephant am I looking at?” dynamic. On the surface, I completely agree with you about the validity of putting a gas powered clock a house. On the other hand, I am completely ignorant of its applications. So without understanding it all, I still stand on my previous comment. We can agree to disagree and your point is well taken.

    As for the battleships that don’t want to comply, I wholeheartedly disagree. It’s been a while since I was at an ENERGY STAR meeting, but in years past, I was in the room during the discussion. I would argue that there was only 20-30% of the discussion that had to do with holding back on improvements. Those usually came from mid to small size manufacturers who didn’t have the resources to do their own window development. If anything, many ‘big battleships’ were leading the charge to push the threshold. I do recall some push back on the R-5 program for a number of different reasons, not the least of which was timeline and delivery method. From what I’ve learned since, it was a valid concern.

    That said, part of the reason the window industry is so contentious is that there is a difference of opinion about what exactly is pushing the envelope. You can’t that windows are the only truly passive feature that positively affects power usage in a structure. But, people are also lazy and it’s a lot easier to play Honeywell Roulette than it is to actively manage the passive features that exist. It makes it REALLY hard to set criteria. I happen to abhor hot spots, so I tend to side with the lower is better crowd – but it doesn’t make the opposite perspective any less valid.

    Lastly, if you go to the NFRC history, Behind the Glass, http://www.nfrc.org/documents/NFRC%20History.pdf, it wasn’t “in best interest to all be speaking the same language, testing to the same methods and providing a level playing field in order to allow consumers to make an informed choice.” It was in the best interest to do whatever was necessary to keep DOE, spurred by the FTC, from regulating the industry! It brings this whole discussion full circle as this was the very first FTC case I tracked down and pulled, since a lot of people simply did not believe that NFRC wasn’t about Andersen, Marvin and Pella trying to get a leg up on the little guys. I guess I’ll need to dig it up again for my new website. Thanks!

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