Solar Age Industries, Inc

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IN THE MATTER OF SOLAR AGE INDUSTRIES, INC.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3206. Complaint, Jan. 28, 1987—Decision, Jan. 28, 1987 This consent order prohibits, among other things, an Albuquerque, N.M. manufacturer and seller of solar energy heaters from misrepresenting the efficacy and performance of its solar space heaters or any other kind of solar energy equipment, unless it can substantiate its claims. Additionally, respondent is prohibited from using the phrase “up to” in energy-related claims, unless the upper limit of potential savings indicated in the claim can be achieved by an appreciable number of consumers. Appearances For the Commission: Michael Dershowitz.

For the respondent: Robert N. Singer, Singer, Smith & Powell, Albuquerque N.M.

COMPLAINT The Federal Trade Commission, having reason to believe that Solar Age Industries, Inc. (“Solar Age”), a corporation, has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. Solar Age Industries, Inc. is a Nevada corporation with its principal office or place of business at 6400 Uptown Boulevard, Northeast, Albuquerque, New Mexico. Par. 2. Respondent manufactures, advertises, offers for sale, sells and distributes solar energy equipment including, inter alia, a “solar space heater” which consists of one or more rooftop collectors, one hot and one cold air duct and one small inlet fan, and which is designed to collect, but not store, the sun’s rays for supplemental heating of individual residences or other small buildings. Par. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce. ’ Par. 4. In advertisements and through the use of consumer testimonials contained therein, and through promotional materials disseminated to respondent’s distributors, respondent has made various statements about the energy savings capability and area heating Complaint 109 F.T.C.

capability of its solar space heater sold under the brand name “Solar Age Model 37,” or sometimes referred to as “Solar Age Manufacturing Hot Air Collector Kit.” Typical and illustrative of these statements, but not all-inclusive thereof, are the following from the advertisements attached hereto as Exhibits A, B and C: Cut your heating bills up to 40%.

* * * * * * * . with a Solar Age Manufacturing Hot Air Collector Kit you can cut [heating] costs almost in half.

* * * * * * * Our Solar Age system has reduced our gas bills by over 30%. * * * * * * * Enough [BTUS] to heat 600-800 sq. ft.! * * * * * * * Our Solar Age heating system heats our whole house, even the garage! * * * * * * * Solar Age Mfg. Collector Kits have an average 4 year pay back period. * * * * * * * Solar Age Manufacturing collectors have been given a 2 higher BTU output rating per square foot than any other in the country. Par. 5. Through the use of the above statements, and other statements in advertisements not specifically set forth herein, respondent has made the following material representations, directly or by implication:

1. Use of the Hot Air Collector Kit will save an appreciable number of consumers 40% or close to 40%, and possibly as much as 50%, on their heating bills under reasonably foreseen circumstances. 2. Advertised savings of over 30% on the heating bills of one consumer reflect savings that other consumers will obtain with the use of the Hot Air Collector Kit under reasonably foreseen circumstances. 3. The Hot Air Collector Kit will provide enough heat to heat 600- 800 square feet of space in residences or other small buildings under reasonably foreseen circumstances.

4, Advertised whole-house heating of one consumer’s residence with the use of the Hot Air Collector Kit reflects the heating performance that other consumers will obtain under reasonably foreseen circumstances.

5. It will take an average of 4 years for consumers to save enough money on their heating bills by using the Hot Air Collector Kit to recoup the retail cost of the Hot Air Collector Kit. 6. Solar Age collectors are the highest BTU-rated collectors, per square foot, in the country.

SOLAR AGE INDUSTRIES, INC. 25 23 Complaint Par. 6. In truth and in fact:

1. Few, if any, consumers will save 40% or close to 40%, on their heating bills as a result of using the Hot Air Collector Kit under reasonably foreseen circumstances.

2. Advertised savings of over 30% on the heating bills of one consumer do not reflect savings that other consumers will obtain with the use of the Hot Air Collector Kit under reasonably foreseen circumstances.

3. The Hot Air Collector Kit will almost never be able to provide enough heat to heat 600-800 square feet of space in residences or other small buildings under reasonably foreseen circumstances. 4, Advertised whole-house heating of one consumer’s residence with the use of the Hot Air Collector Kit does not reflect the heating performance that other consumers will obtain under reasonably. foreseen circumstances.

5. Few, if any, consumers will save enough money on their home heating bills by using the Hot Air Collector Kit to recoup the retail . cost of the Hot Air Collector Kit within an average of 4 years. 6. Solar Age collectors are not the highest BTU-rated collectors, per square foot, in the country.

Therefore, the representations set forth in Paragraph Five were, and are, false and misleading.

Par. 7. Through the use of the statements set forth i in Paragraph Four, and others not specifically set forth herein, respondent has represented, directly or by implication, that at the time of making the representations set forth in Paragraph Five it possessed and relied upon a reasonable basis, for those representations. Par. 8. In truth and in fact, at the time of the initial dissemination of those representations and each subsequent dissemination, respondent did not possess and rely upon a reasonable basis for making those representations because, inter alia, respondent’s field data, testimonials and calculations were not designed or conducted in a manner to produce competent, reliable and statistically meaningful results. Therefore, respondent’s representations, as set forth in Paragraph Seven were, and are, false and misleading. - Par. 9. The acts or practices of respondent as alleged in this complaint, and respondent’s placement in the hands of its distributors of the means and instrumentalities by and through which others may have used the aforesaid false, misleading and deceptive representations, constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act.

Complaint EXHIBIT A You Can) s EArt SIV today ne nudter Where VUE EPG MSCS Out Giere saosin Mot ar sate oe . . t STIG at Cut your heating bills up to 40%.

Really.

No one has to tell vou how expensive it is ( heat vour home. But with a Sular Age Manutacturing Hot Air Collector Kit vou can cut those costs almost in half.

Our collector is cost clfective.

Solar Age Manufacturing collectors have been given a higher BTU output rating per square foot than any other in the country. You can expect an etficiency of as much as 34.000 BTUs per day. Enough You can do-it-yousself. to heat 600-800 sq. ft! Our collector kit re-tlly is easy to install. There's only 3 moving parts. You just mount it. duct it. and plug it in.

Safe insulation.

Solar Age Mfg. does not use Polystyrene in its insulation.

There's no chance of our system giving off harmful gases.

I D Yes! I've enclosed $4 for all the information on all ] three Solar Age Mfg. systems. [ understand for that I will receive a cassette tape and tax credit information | that pertains to my state.

Name l | | Address i I I I I City State Zip | 2.

I 30 L Az ace eg ‘Sammmeesse’ Send (0: Solar Age Manufacturing Inc. | Dept 300 9001 Central N.E.

j Albuquerque. NM 87123 It's inexpensive.

We knw thats a relive statement but ouge me collector is instcied the sunshine is tree solar Age Mfg. Collector Kits tive an average 4 vezr pay back period. [n addition the federal government will pay 40%. in tax credits for your new heating system. With individual state credits the percentage could go even * higher.

A reputation to maintain.

Solar Age Mfg. is the nation’s largest solar air manufacturer.

Nationally certitied by the Solar Rating & Certification Corporation (SRCC) and the Air Conditioning and Refrigeration Institute (ARI) you can buy confidendy knowing vour system bears the high standards of industry excellence MARCH (904 45 SOL AR AGRE INDUSTRIgg INC Complaint SOLAR AGE SOLAR HEAT/HOT WATER SYSTEMS EVERYONE CAN AFFORD Mr. George J. Spaulding Says:

“Our Solar Age system has reduced our gas bills by over 30%, Before we had the solar Installed, our house was cold and our furnace ran continuously. ft is maintenance-tree, quiet operating and really circulates the heat in our house.”

SHOULDN'T YOU INVEST IN A SOLAR AGE SYSTEM? © While the fax credits are still available © While the 100% financing Is still available CALL TODAY FOR A FREE ESTIMATE! JUAN TABO .

* UPTOWN RIO RANCHO OOWNTOWN 081-3315 992-9589 242-2867 292-6092 6400 Uotonn Biva NE 14$} Ara Rancho Or 117 Marquette NW 2705 Juan TsDO N Suite #228 Bicg A Suite! ASK ABOUT OUR NEW SOLAR CENTRAL AVE, 7796-3288 9001 Cenirai NE SUNSCREEN — SAVING YOU MONEY “YEAR ROUNO”

EXHIBIT ¢ 109 F.T.¢.

=O0LA AGE “SS SOLAR HEAT/HOT WATER SYSTEMS EVERYONE CAN AFFORD Mr. Arthur Mordand Says:

“Our Solar Age heating system heats our whole house, even the garage! Ithas no maintenance and quiet operation.”

SHOULDN'T YOU INVEST IN A SOLAR AGE SYSTEM? © While the tax credits are stil! available e While the 100% financing is still available CALL TOOAY FOR A FREE ESTIMATE! CENTRAL AVE. RIO AANCH OWNTOWN JUAN TASO 296.3256 HCHO ° c 092-9589 242-2867 292-8092 GOO1 CentraiNE 1453 Rig Aancho Or. 7 Marquetia NW 2708 Juan Tad0 NE Sute€& 9228 Blog. A Sune} : UPTOWN ASK ABOUT OUR NEW SOLAR SUNSCREEN SAVING YOU MONEY “YEAR ROUND”

81-335 6400 Uptown Blvd NE 45st SOLAR AGE INDUSTRIES, INC. 29 23 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Solar Age Industries, Inc., is a corporation with its office and principal place of business located at 6400 Uptown Boulevard, Northeast, Albuquerque, New Mexico. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

ORDER Definitions For purposes of this order, the following definitions shall apply: Energy-related claim means any general or specific, oral or written representation that, directly or by implication, describes or refers to energy savings, energy cost savings, area heating capability, efficiency or conservation, “payback,” or “payback” potential. A competent and reliable test means any scientific, engineering, Decision and Order 109 F.T.C.

laboratory, or other analytical report, study, or survey prepared by one or more persons with skill and expert knowledge in the field to which the material pertains and based on testing, evaluation and analytical procedures that ensure accurate, reliable and statistically meaningful results.

A solar space heater is a particular type of solar energy equipment. Specifically, it is equipment which typically consists of one or more rooftop collector panels, one hot and one cold air duct and a small inlet fan, and which is designed to collect, but not store, the sun’s rays for supplemental heating of individual residences or other, small buildings. The term describes, inter alia, respondent’s “Solar Age Model 37,” also referred to by respondent as its “Hot Air Collector Kit.”

PART I It is ordered, That respondent Solar Age Industries, Inc., a corporation, its successors and assigns, and its officers, and respondent’s agents, representatives, and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacture, advertising, offering for sale, sale, or distribution of any solar space heater or any other solar energy equipment in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from: A. Representing, directly or by implication, in any manner that: (1) More than a few consumers may be able to reduce their heating bills by 40%, or close to 40%, by using the Hot Air Collector Kit or any other such solar space heater, as defined herein. (2) Any one consumer’s experience with respondent’s solar space heater reflects what other consumers will experience under circumstances they can reasonably foresee, unless such is the case. (3) The Hot Air Collector Kit or any other such solar space heater will provide more than a few consumers enough heat by itself to heat 600-800 square feet of space in residences or small buildings. (4) More than a few consumers may be able to save enough money on their heating bills by using the Hot Air Collector Kit by itself to recoup the retail cost of the Hot Air Collector Kit or any other such solar space heater which ranges in cost from $1,095 to $3,595, within an average of 4 years.

(5) Its solar collector is the highest Btu-rated solar collector per square foot, in the country, unless such is the case. B. Making any energy-related claim for any solar space heater, or any other solar energy equipment, unless at the time that the claim SOLAR AGE INDUSTRIES, INC. 31 23 Decision and Order is made, respondent possesses and relies upon a competent and reliable test or other objective material which substantiates the claim. C. Making any energy-related claim which uses the phrase “up to” or words of similar import unless the maximum level of savings or performance can be achieved by an appreciable number of consumers; and, further, in any instances where consumers could not reasonably foresee the major factors or conditions affecting the maximum level of savings or performance, cease and desist from failing to disclose clearly and prominently the class of consumers who can achieve the maximum level of savings or performance.

D. Misrepresenting, directly or by implication, in any manner, the purpose, content, or conclusion of any test, study, analysis, rating or survey upon which respondent relies as substantiation for any energy-related claim, or making any representation which is inconsistent with the results or conclusions of any such test, study, rating or survey.

PART II It is further ordered, That respondent Solar Age Industries, Inc., a corporation, its successors and assigns, and its officers, and respondent’s agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the manufacture, advertising, offering for sale, or distribution of any solar space heater or any other solar energy equipment in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act, shall, for at least three years from the date of the last dissemination of energy-related claims, maintain and upon request make available to Federal Trade Commission staff for inspection and copying, copies of:

1. all materials relied upon to substantiate any energy-related claim; and 2. all test reports, studies, surveys or demonstrations in their possession that contradict, qualify, or call into question any energyrelated claim.

PART III It is further ordered, That respondent shall: A. Within thirty (30) days after the date of service of this order, send the following material via first class mail to every person or firm that is a current distributor of respondent’s solar energy equipment and thereafter to every person or firm that becomes a distributor during the first year from the date of service of this order: Decision and Order 109 F.T.C.

1. a copy of this order, and 2. a copy of the cover letter attached to this order as Attachment A, incorporated herein by reference.

B. Distribute a copy of this order to each of respondent’s operating divisions, and to each of its officers, agents, representatives or employees engaged in the preparation or placement of advertisements or other sales materials.

C. Supply to the Federal Trade Commission upon request the names and addresses of those parties to whom respondent distributed the material required by Paragraphs A and B of Part III of this order. PART IV It is further ordered, That respondent shall notify the Commission at least thirty (30) days prior to the effective date of any proposed change in the corporate respondent such as dissolution, assignment or sale, resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of this order.

PART V It is further ordered, That respondent shall, within sixty (60) days after this order becomes final, file with the Commission a report in writing, setting forth in detail the manner and form in which it has complied with the order.

ATTACHMENT A (Solar Age Letterhead] (Solar Age Distributors] Re: Advertising Claims and Practices Dear Solar Age Distributors:

As a result of a Federal Trade Commission investigation of advertising claims for our Solar Age Model 37 Solar Space Heater (the Hot Air Collector Kit), we have entered into the enclosed Consent Order Agreement. The agreement is for settlement purposes only and does not constitute an admission that Solar Age or its distributors have violated the law. At issue in the investigation were a number of energy cost savings, performance and payback claims.

We agree to conform our future advertising practices to the standards set forth in this agreement, and to refrain from the use of all promotional material that may contain contrary claims. In order to insure that such claims will no longer be made, we request that you refrain from making them, either orally or in writing, and to advise your dealers to do so as well. Please forward to us any remaining literature relating to our products which may be in your possession or that of your dealers and which does not conform to the enclosed agreement.

SOLAR AGE INDUSTRIES, INC. 33 23 Decision and Order Thank you very much for your assistance in this regard. Sincerely, SOLAR AGE INDUSTRIES, INC.

By:

Alan D. Schwanke, President Complaint 109 F.T.C.