It may have been a mild winter for most of the U.S. but several window marketers are experiencing the chill of an FTC consent order. The companies in question marketed replacement windows which they alleged offered homeowners considerable energy savings. For example, they advertised significant savings in monthly energy bills along with certain guarantees if those savings were not achieved.
The FTC alleged that the savings claims were unsubstantiated. The agency also signaled in its press release that it continues to engage in a “broad effort” to ensure that “environmental marketing is truthful and based on solid scientific evidence.”
However, one provision in the orders has potentially broad implications. Many of the claims promised energy savings “up to” a certain amount. The NAD has traditionally permitted savings claims so long as at least 10% of the items are available at the lowest price. Similarly, the FAA, which regulates airline fare advertising, permits lowest fares to be advertised so long as they are reasonably available. Even the FTC in the past has stated in the context of fuels savings that “up to” claims should be based on what the average consumer can reasonably expect to achieve. The replacement window orders, however, only permit claims of energy savings “up to” a certain amount if “all or almost all consumers are likely to achieve the maximum savings claimed.”
So far the FTC has provided no explanation for its treatment of “up to” claims in these cases other than to state in the proposed analysis that the words “up to” in the context of these ads do not “effectively qualify” the claims. Even if the Commission’s action in this matter does not signal a general pulling back on the meaning of “up to” it’s unclear what other situations might trigger the Commission to take a more narrow view of the phrase. If the FTC’s recent action signals a more narrow view in many situations of “up to” claims then it will likely have a significant impact on the ability of advertisers to make such claims.