Aftermarket brake marketer settles FTC charges

| Monday, August 11, 2003

A distributor of Brake Guard aftermarket braking devices has settled with the Federal Trade Commission and Department of Justice over charges he made false and unsubstantiated safety and performance claims for the product, according to the FTC.

The settlement with the distributor, Larry Jones, would prohibit him from making 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 FTC will not make Jones pay the penalty as long as financial information he provides the agency is truthful and complete. If officials find he omitted anything or lied about his finances, he will have to pay the $100,000, the FTC statement said.

In 1995, the FTC charged that Brake Guard and its owner, Ed Jones, Larry’s father, 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 said those claims violated federal law.

Administrative Law Judge Lewis F. Parker upheld the charges in a May 1997 decision. Brake Guard and Ed Jones appealed Judge Parker’s decision to the full commission, which upheld his opinion.

The commission order, which became effective March 30, 1998, barred Brake Guard or those who represent or work for them from making the prohibited claims about the Brake Guard Safety System, Advanced Braking System, Brake Guard ABS.

In May 2001, the Department of Justice, at the FTC’s request, filed suit in U.S. District Court in Seattle 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 alleged that their promotional materials, including a Web site, contained claims that violated the FTC’s 1998 order.

The Department of Justice and the FTC asked the court to stop the defendants from violating the order, to impose civil penalties, to bar the defendants from violating the FTC Act and to order consumer restitution.

Ed Jones died shortly after the complaint was filed. The court entered a default judgment on July 31, 2002, against Brake Guard Products Inc., Brake Guard LLC of Nevada, Brake Guard LLC of Washington and Kimberly Bennett in her capacity as representative of the estate of the late Ed Jones.

The settlement, which was filed with the court for its approval July 7, ends the litigation. It bars Larry Jones or those who represent or work for him from making false or unsubstantiated claims about aftermarket braking products. It also requires him to substantiate any claims he makes about his company’s braking devices. He also has to send information about the court order to his distributors and 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.

Despite the consent decree, Larry Jones’ attorney, Brian Ritchie, questions the FTC’s involvement in the case since it involved no consumer complaints.

“There has never been one single consumer complaint to the FTC or Department of Transportation,” Ritchie said. “Larry Jones had scientific testing done. The government has the test results. We have repeatedly shown the product performs as advertised.”

According to Ritchie, the consent decree allows Brake Guard to remain in business and to continue selling its products with a slight change in the way it markets its products.

“We believe we would have prevailed at trial, but Mr. Jones had already spent $100,000 plus on legal fees and testing,” Ritchie added. “And, the consent decree allows Jones to continue selling his product as he has.”

--by René Tankersley, feature editor

René Tankersley can be reached at renet@landlinemag.com.

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