FTC Action Leads to Court Order: Home Insulation Marketer to Pay $350,000

FTC Action Leads to Court Order: Home Insulation Marketer to Pay $350,000

A federal court ordered a home insulation marketer to pay a $350,000 civil penalty for making deceptive and unsubstantiated claims about his products’ insulation capabilities. The $350,000 figure is the largest civil penalty awarded in a home insulation case.

Edward Sumpolec, doing business as Thermalkool, Thermalcool and Energy Conservation Specialists, violated the Federal Trade Commission Act and the agency’s R-value Rule in selling liquid coating and foil radiant barrier products. Sumpolec’s advertising included false claims such as “R-100 paint,” “This . . . reflective coating will reduce wall and roof temperatures by 50-95 degrees . . .” and “Saves 40 to 60% on your energy bills.”

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 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.

In addition to imposing a $350,000 civil penalty against Sumpolec, the court order permanently prohibits 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.

It also bars Sumpolec from violating the R-value Rule by failing to base R-value claims only on proper tests, failing to make product fact sheets available to customers prior to sale, and failing 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.” The order also bars him from failing to have a reasonable basis for claims that insulation can cut fuel bills or fuel use, failing to make the mandatory disclosure regarding such claims, and failing to keep records of all data about such claims for at least three years.

The order was entered by the U.S. District Court for the Middle District of Florida, Orlando Division on Jan. 9, 2013.

For more information from the FTC, visit www.ftc.gov/opa/2012/05/windows.shtm

Note that environmental marketing claims that violate the FTC regulations may also serve as the basis for an unfair and deceptive trade practices act violation at the state level.

To learn more, see Before You Build Green: A Primer on Avoiding Liability Pitfalls, developed by NAHB’s Building Product Issues Committee.