Fuel-savings device marketers receive continued scrutiny by FTC

| Friday, May 17, 2002

As fuel prices creep higher and higher, 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 fuel-saving and other energy-related advertising claims.

While some of the warnings addressed Internet marketers of purported energy-saving products for the home, most of the warnings were targeted at marketers of automotive gadgets and additives. The letters reminded the advertisers they need scientific substantiation for their energy-saving claims and provided them with additional advertising guidance.

The warnings advised 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 fuel-saving automotive devices and additives; instantaneous water heaters and home water purification; and transient voltage surge suppressors.

The FTC web surf found 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 fuel 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 percent." The staff's experience with these products suggests 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 fuel-saving devices and additives, and has not found any product that significantly improves fuel mileage.

The Internet surf and warning letters are part of the FTC's continuing law enforcement efforts to combat deceptive energy-saving claims. 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 percent in increased mileage and 42 percent 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?), fuel-saving tips (How To Be Penny Wise, Not Pump Fuelish), and guidance for heating and cooling homes (Weathering the High Cost of Heating Your Home, and Cooling Your Home: Don't Sweat It). The FTC also has a dedicated energy & environment web page at 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 www.epa.gov/otaq/consumer.htm.

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