Five companies that sell replacement windows in numerous states will have to stop making exaggerated and unsupported claims about the energy efficiency of their windows, and how much money consumers could save on their heating and cooling bills by having them installed, under settlements with the Federal Trade Commission. The settlements prohibit the companies from making these types of deceptive claims.
"Energy efficiency and cost savings are major factors for many consumers buying replacement windows," said David Vladeck, Director of the FTC's Bureau of Consumer Protection. "The FTC is committed to making sure that the information consumers get is accurate and that marketers can back up the claims they make."
The cases are part of a broad FTC effort to ensure that environmental marketing is truthful and based on solid scientific evidence. Also today, the agency issued a new consumer education publication called "Shopping for New Windows," which provides information on factors that affect the energy savings replacement windows are likely to provide; things to consider when shopping for new windows, such as cost, material, style, and installation; and how an energy performance rating label can help consumers choose the windows that are best for their specific needs.
The FTC's complaints allege the five companies engaged in deceptive practices by making unsupported energy efficiency and money-savings claims – in some cases, that consumers could cut their energy bills in half by using replacement windows alone. The companies named in the settlements are: Gorell Enterprises, Inc.; Long Fence & Home, LLLP; Serious Energy, Inc.; THV Holdings LLC; and Winchester Industries.
Gorell Enterprises, Inc. Based in Pennsylvania, Gorell also operates under the names Gorell Windows & Doors and American Conservatory Systems. It manufactures windows with the "Thermal Master III" glass system and other lines. The company's "40% Energy Savings Pledge" promised consumers savings of at least 40 percent of home fuel consumption for both heating and cooling in the first year after their windows were installed, or they would repay them the difference, up to $500. According to the FTC's Complaint, Gorell lacked a reasonable basis for claiming that consumers who replace their windows with Thermal Master III windows were likely to achieve residential energy savings of 40 percent or save 40 percent on home heating and cooling costs.
Long Fence & Home, LLLP. Based in Maryland, Long Fence & Home does business under a number of names, including Long Windows. It distributes and installs Serious Energy's Quantum 2 windows with SuperPak glass, among other lines. Long's advertisements in various media have included claims such as "50% Energy Savings Guaranteed," and "save 50% on Energy Bills – or LONG PAYS YOU!" Long also pledged 50% savings on heating and cooling energy usage. Long's website included a "savings calculator" that invited users to enter their average monthly energy bills and click a button to "CALCULATE SAVINGS." According to the FTC, Long's savings claims for the advertised windows were unsubstantiated.
Serious Energy, Inc. Based in California, Serious Energy provides its dealers with marketing materials, including brochures and other information on its website. These materials have included claims such as, "Guaranteed to reduce your heating and cooling use by up to 49%." Serious Energy also offered heating and cooling reduction pledges, varying by dealer, and promised consumers would be paid up to $500 if they did not realize these savings within one year of when the windows were installed. The FTC alleged that Serious Energy's savings claims for the advertised windows were unsubstantiated.
THV Holdings LLC. Based in Kentucky, THV's telemarketing sales scripts represented that its replacement windows will "cut energy bills in half"; that homeowners will typically see a 35 to 55 percent reduction in monthly energy bills; that "our homeowners have noticed that our windows saved them 35% to 55% off their energy bills," and pledged that its windows systems "will pay for themselves in energy savings alone in 8 years or we will pay the difference . . . our windows are free!!" The FTC charged that THV disseminated the claims in sales scripts for the company's THV Compozit windows with Alter-Lite triple pane glass. The FTC also charged that THV lacked a reasonable basis for its savings claims.
Winchester Industries. Based in Pennsylvania, Winchester manufactures Bristol and WinterLock Super Triple-E, A-Plus with Alpha-10 windows. In its promotional materials, Winchester claimed that consumers would "reduce energy costs by 47%" and that "the triple-paned design of some replacement windows, such as Bristol windows, can also produce energy savings of up to 50% a year." Winchester's consumer testimonials claimed similar results, and the company pledged a heating and cooling reduction of at least 47 percent. The FTC charged that Winchester lacked a reasonable basis for making its energy savings claims for its windows.
The proposed orders settling the FTC's charges against the five companies are designed to prevent the companies from engaging in similar deceptive marketing practices in the future.
Part I of the proposed settlements prohibits each company from claiming:
unless the claim is non-misleading and when the company makes the claim, it has competent and reliable scientific evidence to substantiate that all or almost all consumers are likely to achieve the maximum savings claimed.
In addition, if the company claims or guarantees that consumers will achieve specific energy savings or reduced heating or cooling costs under certain circumstances (for example, by replacing a window made of a certain material in a specific region of the country), it must clearly and prominently disclose those circumstances near where the claim or guarantee is made. The company also must be able to substantiate that all or almost all consumers are likely to see the maximum savings claimed under those circumstances.
Part II of the proposed settlements prohibits each company from making claims:
unless the representation is non-misleading and is substantiated by reliable scientific evidence.
As noted above, the proposed orders require each company to substantiate savings claims that include the words "up to" – for example, if they claim consumers will save "up to" a certain amount of money, or achieve energy savings "up to" a certain amount, it must have competent and reliable scientific evidence to substantiate that all or almost all consumers are likely to achieve the maximum savings claimed.
The proposed orders with Serious Energy, Gorell, THV, and Winchester include an additional provision designed to make sure they do not give misleading information to their distributors that could be passed on to consumers. The proposed order with THV also requires it to conduct a training program to help principals, officers, managers, employees, and representatives avoid misleading claims. The other four firms are required to broadly distribute copies of the order within each company to help ensure their employees' compliance.
The Commission vote to issue the administrative complaints and accept the consent agreement packages containing the proposed consent orders for public comment was 3-0, with Commissioner J. Thomas Rosch abstaining, in each case. The FTC will publish a description of the consent agreement packages in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through March 23, 2012, after which the Commission will decide whether to make the proposed consent orders final. The FTC acknowledges the valuable assistance of the Washington State Attorney General's Office in the investigation of this matter.
Interested parties can submit written comments electronically or in paper form by following the instructions in the "Invitation To Comment" part of the "Supplementary Information" section. Comments in electronic form should be submitted using these links and following the instructions on the web-based form:
Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
NOTE: The Commission issues an administrative complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the respondent has actually violated the law. A consent agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.