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Coating Claims Draw $350K Fine

Monday, February 4, 2013

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False, dramatic energy-saving claims about paints and coatings have cost one Florida home-insulation marketer $350,000 in civil penalties.

Edward Sumpolec of Palm Bay, FL, who conducted business under three separate entities, made deceptive and unsubstantiated claims about his products in violation of the Federal Trade Commission Act and its R-value rule, a federal court in Florida ruled Jan. 9.

Sumpolec
YouTube

Sumpolec received the largest penalty ever imposed in a home insulation case, the Federal Trade Commission said. This local commercial advertising Sumpolec’s array of products is posted on YouTube.

The U.S. Department of Justice won the order on the merit of the Federal Trade Commission’s case without having to go to trial.

The figure is the largest penalty awarded in a home insulation case to date, the FTC said in announcing the decision Thursday (Jan. 31).

False Energy-Saving Claims

Sumpolec, doing business as Thermalkool, Thermalcool and Energy Conservation Specialists, exaggerated the capabilities of the liquid coating and foil-radiant barrier products he sold through Internet-based stores, including a store on eBay, the FTC reported.

According to the FTC, Sumpolec made the following false advertising claims since 2007:

  • “R-100 paint”
  • “This . . . reflective coating will reduce wall and roof temperatures by 50-95 degrees”
  • “4 layered coating system . . . equals R-100 insulating value”
  • “Saves 40 to 60% on your energy bills”

However, Sumpolec lacked any “reasonable basis” for such cost-saving claims, did not retain any material records for the required amount of time, and sold products to customers without including accurate fact sheets about the products’ performance, according to the FTC.

Sumpolec explained the statements as “typos” and said that the advertisements should state that his products are “equal to” or “equal” the stated R-value, a claim that he argued was justified based on the performance of his products as compared to conventional insulation.

ebay
www.ebay.com

Sumpolec advertised and sold the liquid coating and foil-radiant barrier products through internet stores, like eBay.

But, the U.S. District Court for the Middle District of Florida, Orlando Division, rejected his argument and ruled Sumpolec in violation of 15 U.S.C. § 45(a) and 16 C.F.R. § 460.5.

A product’s R-value is a measure of its resistance to heat flow: The higher the R-value, the greater the insulating power. The agency’s R-value rule requires home-insulation manufacturers, professional installers, new home sellers, and retailers to provide R-value information, based on the results of standard tests, to help inform consumers.

A local commercial advertising Sumpolec’s array of products is still posted on YouTube.

Barred from Making False Claims

In addition to the record-breaking civil penalty against Sumpolec, the court order permanently bars him from making a claim about a product’s insulation value or energy savings unless it is true, not misleading, and based on competent and reliable scientific evidence. 

The ruling also requires him to make product fact sheets available to customers before sale and to make mandatory advertising disclosures, including type of insulation, R-value at a specific thickness, coverage area for that thickness, and the statement: “The higher the R-value, the greater the insulating power. Ask your seller for the fact sheet on R-values.” 

Sumpolec must also:

  • Have a reasonable basis for any claims that insulation can cut fuel bills or fuel use;
  • Make the mandatory disclosure regarding such claims, and
  • Keep records of all data about such claims for at least three years.

Efforts to reach Sumpolec for comment Friday (Feb. 1) were unsuccessful.

Greenwashing Crackdown

The case against Sumpolec follows the FTC's recent announcement that it would be cracking down on "green" marketing claims about any product.

In October 2012, the agency issued new "Green Guides" that outline specific requirements for environmental product claims. The new guides immediately drew the attention of the American Coatings Association, which represents coating manufacturers.

The release of the guides was followed by FTC orders rebuking Sherwin-Williams and PPG Architectural Finishes for marketing claims about some of their products.

The new guidelines are summarized here.

   

Tagged categories: Advertising; Building envelope; Insulation; Laws and litigation; Reflective coatings

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