FTC Halts Bogus Claims for Fuel Saving Device
On August 22, the manufacturer of a magnetic “fuel saving” and emissions-reduction device that did not save fuel or reduce emissions will pay $4.2 million to settle Federal Trade Commission (“FTC”) charges that his advertising claims were false. The FTC will seek to provide redress to consumers who bought the device based on the false advertising claims. In addition, the defendants will be banned from selling or manufacturing magnetic fuel savings and emissions reduction devices.
In October 2004, the FTC filed a suit in U.S. district court alleging that marketers, and the resellers working with them, were making deceptive claims for FuelMAX and Super FuelMax products. The Web site operators and their affiliates– made claims such as:
• Increases gas mileage 27%;
• Reduces Fuel Consumption; and,
• Reduces Emissions;
The FTC alleged that the magnetic fuel saver does not save fuel, does not increase gas mileage, and does not reduce emissions. The agency charged that the false claims violate the FTC Act and also alleged that by providing promotional materials with false claims to affiliates, the defendants provided them with the means to violate the FTC Act.
In May 2005, the Web site marketers and spammers who promoted the products settled the FTC suits. The settlements barred violations of the FTC Act and the CAN-SPAM Act and barred them from making deceptive claims. The action announced settles charges against the manufacturer, International Research & Development Corp. of Nevada, and its principal, Anthony Renda.
The settlement imposes a lifetime ban on the manufacture, advertising, or sale of FuelMAX, Super FuelMAX, or any similar fuel saving or emissions-decreasing product. It bars false or unsubstantiated claims and misrepresentations that products increase gas mileage or reduce emissions. The settlement bars the defendants from misrepresenting the contents, validity, results, conclusions, or interpretations of studies and bars them from performance or efficacy claims unless they possess and rely upon competent and reliable evidence. It also bars them from assisting others or providing others with the means and instrumentalities to commit deception. Finally, the defendants will pay $4.2 million for consumer redress.
The FTC also established a hotline containing a recorded message for consumers who think they are entitled to a refund. Consumers should call 1-877-382-2020 for more information about obtaining a refund. These cases were brought with the assistance of the Environmental Protection Agency.
Authored by
Camelia C. Mazard
202-589-1837
cmazard@dbmlawgroup.com
