FTC Wins Deceptive Insulation Claims Case
The Federal Trade Commission recently won a court order against several companies for fraudulently claiming their coatings have insulating properties.
“At a time of high energy prices and deep concern about inflation, today’s ruling shows the impact FTC cases are having on issues of vital economic importance to American consumers,” said Sam Levine, Director of the FTC’s Bureau of Consumer Protection.
What Happened
In July 2020, the FTC sued four companies that sell paint products, alleging that they misled consumers about their products’ insulation and energy-savings capabilities. The coatings were reportedly sold for use on buildings and homes.
The four companies filed against included:
As filed in court, the FTC explained in its charges that the companies falsely overstated the R-value ratings—which measure a product’s resistance to heat flow—of the coatings. Based on the R-value of a product, consumers can improve the energy efficiency of their buildings or homes that meet their desired energy-saving needs.
The complaint also alleged the companies made deceptive statements about heat flow and insulating power.
“Companies touting the energy-saving properties of their products must have scientific support for their claims,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, at the time. “When they don’t, the FTC will step in to make sure they do.”
According to a report from the time of the filing, the Commission vote authorizing the staff to file each complaint was 4-0-1, with Commissioner Rebecca Kelly Slaughter not participating.
The FTC filed the complaint against the Superior Products defendants in the U.S. District Court of the District of Kansas; the complaint against the SuperTherm defendants in the U.S. District Court for the District of Arizona; the complaint the SMP Thermo-Shield defendants in the U.S. District Court for the Middle District of Florida; and the complaint against the F & G International Group defendants in the U.S. District Court for the District for the Southern District of Georgia.
In June 2022, the U.S. District Court for the Middle District of Florida ordered SPM Thermo-Shield, Inc. to permanently halt deceptive energy-efficiency claims it has been making about wall coating products that it sells for houses and other buildings.
At the time, the court also issued a permanent injunction prohibiting SPM Thermo-Shield and its officers from misrepresenting the coatings’ insulating or energy-saving capabilities.
By taking these actions, the defendants are permanently prohibited from:
SPM Thermo-Shield, Inc. has also been prohibited from providing the “means and instrumentalities” that would allow anyone else to make such misleading R-value or energy-savings claims.
The opinion, order and permanent injunction were filed in the U.S. District Court for the Middle District of Florida, Fort Myers Division. They have since been signed and entered by the court.
“We know consumers are concerned about rising energy costs,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, at the time. “In this environment, it’s more critical than ever that sellers be honest about energy efficiency claims—and we are poised to hold them accountable when they are not.”
What Now
On Oct. 11, the FTC announced that it won a court order against F & G International Group Holdings, LLC, FG International, LLC, (FGI) and their principal J. Glenn Davis after suing the company and its CEO for deceptively claiming their paint insulates.
After an investigation, it was discovered that the paint sold by FGI actually does not insulate and that it provides “far less protection than the company claimed and end users of the product received none of the insulation FGI promised.”
The order from the U.S. Court for the Southern District of Georgia permanently bans FGI from making deceptive claims and prohibits them from supporting similar deception from other companies.
In issuing the opinion and order the court found that the FGI defendants harmed consumers, including small businesses, by:
The order prohibits the defendants behind FGI from helping anyone else make misleading claims about insulation ratings or the energy efficiency that any product will provide.
The U.S. District Court for the Southern District of Georgia, Statesboro Division, entered the opinion and permanent injunction.
