THV Holdings LLC

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IN THE MATTER OF THV HOLDINGS LLC CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT Docket No. C-4361; File No. 112 3057 Complaint, May 16, 2012 – Decision, May 16, 2012 This consent order addresses THV Holdings LLC’s marketing and sale of replacement windows for use in residences. The complaint alleges that respondent did not possess and rely upon a reasonable basis substantiating representations that its windows likely pay for themselves in energy savings alone within eight years, when consumers replace their windows with THV Compozit windows with Alter-Lite® triple pane glass; that consumers who replace their windows with these THV windows are likely to achieve residential energy savings of 40%, save 40% on residential heating and cooling costs, or reduce their energy bills by half; and that homeowners have saved 35%-55% off their energy bills by replacing their windows with THV windows when it made them. The consent order prohibits respondent from making any representation that: (A) consumers who replace their windows with respondent’s windows achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs; or (B) respondent guarantees or pledges that consumers who replace their windows with respondent’s windows will achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs; unless the representation is non-misleading and, at the time of making such representation, respondent possesses and relies upon competent and reliable scientific evidence to substantiate that all or almost all consumers are likely to receive the maximum represented savings or reduction. Participants For the Commission: Robert Frisby, Zachary Hunter, Joshua Millard, and Sarah Waldrop.

For the Respondent: Eric Berman, Baker Botts, LLP; and Cory Skolnick, Frost Brown Todd LLC.

COMPLAINT The Federal Trade Commission, having reason to believe that THV Holdings LLC (“respondent”) has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges: VOLUME 153 Complaint 1. Respondent THV Holdings LLC is a Delaware limited liability company with its principal office or place of business at 5611 Fern Valley Road, Louisville, Kentucky 40228. It does business as THV Compozit Windows & Doors, Leingang Home Center, Primax Home Center, True Home Value, Rolox Home Center, and Thomas Construction.

2. Respondent manufactures, advertises, offers for sale, sells, installs, and/or distributes windows, including its THV Compozit Window line with Alter-Lite® triple pane glass. Respondent sells these windows directly to consumers for residential use, and distributes the windows to numerous independent distributors who in turn sell them to consumers for residential use. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act. 4. Respondent has disseminated or has caused the dissemination of advertising and promotional materials, such as web page, newspaper and magazine advertising, brochures, telemarketing scripts, and sales training materials, including but not necessarily limited to the attached Exhibits A through I. Respondent and its independent distributors disseminated or caused the dissemination of these advertising and promotional materials and representations to consumers. The advertising and promotional materials contain the following statements or depictions:

a. THV Window Systems Premium Warranty THV Window Systems will pay for themselves in energy savings within eight years or we pay the difference! . . .

This warranty guarantees a total energy savings equal to or greater than the total purchase price of a full house installation of THV Window Systems at the address shown hereon for a period of eight (8) years. The eight year total energy savings begin the first day of the month subsequent to the completed installation of THV Window Systems. In the event total energy THV HOLDINGS LLC 931 Complaint savings over the eight-year period are less than the complete installation purchase price, the Purchaser shall notify THV using the provided claim forms to file for benefits under this warranty. If energy savings over the eight-year period are less than the completed installation, THV will reimburse the difference between actual savings and the purchase price. Exhibit A.

b. Thermal Line Windows - THV Compozit Window Systems Sales Training Manual  What would happen to your fuel bills if I were able to build a window that acted more like a thermos bottle than a jelly jar? Do you think they would go up or down? Get Answer: They’d go down! State answer pointing to the fuel savings warranty saying:

They would pay for themselves in energy savings alone within 8 years! . . . .

Now ask the question that clears the deck for the Closing Sequence. The goal of this question is to make sure the only thing holding them back is the money.

Great window isn’t it? Other than the cost, is there any reason you wouldn’t want to own these windows and cut that energy bill in half? Exhibit B.

VOLUME 153 Complaint c. THV Sales Training Materials Why are our windows better than everyone else’s? It is the only product that is FREE! That’s right, FREE! Homeowners will typically experience a 35% to 55% reduction in monthly energy bills. Our windows will pay for themselves in energy savings alone within eight years or we will pay the difference. And that’s the Thomas promise! Exhibit C.

d. THV Telemarketing Sales Script THOMAS CONSTRUCTION MANUFACTURES OUR OWN COMPOSIT WINDOW. OUR HOME OWNERS HAVE NOTICED THAT OUR WINDOWS HAVE SAVED THEM 35-55% OFF THEIR ENERGY BILLS AND OUR WINDOWS SYSTEM WILL PAY FOR THEMSELVES IN ENERGY SAVINGS ALONE WITHIN 8 YEARS OR WE WILL PAY THE DIFFERENCE!! WHAT THIS MEANS TO OUR HOME OWNERS!! OUR WINDOWS ARE FREE!!! THAT’S THE THOMAS PROMISE!!! Exhibit D.

e. THV Telemarketing Sales Script CASH BACK DIRECT MAIL PITCH STEP I Hello is Mr. _____ in? Hi this is _____ with Rolox Industries. I’m calling to see if you looked over the material we mailed to you? STEP II What it tells about is a special neighborhood savings program, offering you up to a thousand dollars off on your next home improvement. THV HOLDINGS LLC 933 Complaint So you can remodel your home with triple glass, energy efficient windows and reduce your heating and cooling bills by at least 40%.

Exhibit E.

f. THV Newspaper Advertising LOWER ENERGY BILLS & INCREASE YOUR COMFORT WITH THV REPLACEMENT WINDOWS . . . .

 40% Fuel Savings . . .

THV GUARANTEES IN WRITING . . .

Our windows will pay for themselves in utility bills alone or we will pay you the difference. Exhibit F.

Up to 40% FUEL SAVINGS Compozit frame for superior energy performance and savings. . . . Our fuel pledge is that THV windows will pay for themselves or we will pay you the difference. GUARANTEED! Exhibit G.

g. THV Magazine Advertisement WINNING THE WAR ON HIGH ENERGY BILLS 40% FUEL SAVINGS Guaranteed Our windows pay for themselves or we pay you the difference! GUARANTEED! VOLUME 153 Complaint Exhibit H.

h. THV 40% Fuel Pledge Our pledge: Your new THV Compozit windows will give you an energy savings of 40% on your fuel consumption during the first 12 months after installation or we will pay you the difference! . . . .

This pledges a savings of 40% on your heating and cooling consumption for this residence at the address shown hereon during the 12 month period beginning with the date of this Pledge.

. . . .

Exhibit I.

5. Many factors determine the savings homeowners can realize by replacing their windows, including the home’s geographic location, size, insulation package, and existing windows. Consumers who replace single or double-paned wood or vinyl-framed windows – common residential window types in the United States – with THV replacement windows are not likely to achieve a 40%, 50%, or 35%-55% reduction in residential energy consumption or heating and cooling costs. 6. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that: a. Its windows likely pay for themselves in energy savings alone within eight years, when consumers replace their windows with THV compozit windows with Alter-Lite® triple pane glass;

b. Consumers who replace windows with THV compozit windows with Alter-Lite® triple pane glass are likely to achieve residential energy savings of 40%; THV HOLDINGS LLC 935 Complaint c. Consumers who replace windows with THV compozit windows with Alter-Lite® triple pane glass are likely to save 40% on residential heating and cooling costs; d. Consumers who replace windows with THV compozit windows with Alter-Lite® triple pane glass are likely to reduce their energy bills by half; or e. Home owners have saved 35-55% off their energy bills by replacing their windows with THV compozit windows.

7. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that it possessed and relied upon a reasonable basis that substantiated the representation(s) set forth in Paragraph 6 at the time the representation(s) were made.

8. In truth and in fact, respondent did not possess and rely upon a reasonable basis that substantiated the representation(s) set forth in Paragraph 6 at the time the representation(s) were made. Therefore, the representation set forth in Paragraph 7 was false or misleading.

9. Respondent provided to its independent distributors promotional materials referred to in Paragraph 4. By doing so, respondent provided them with the means and instrumentalities for the commission of deceptive acts or practices. Therefore, respondent’s provision of such materials to its distributors, as described in Paragraph 4 above, constitutes a deceptive act or practice.

10. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission this sixteenth day of May, 2012, has issued this complaint against respondent. By the Commission, Commissioner Rosch and Commissioner Ohlhausen not participating.

VOLUME 153 Complaint Exhibit A

VOLUME 153 Complaint Exhibit B

VOLUME 153 Complaint Exhibit C THV HOLDINGS LLC 941 Complaint Exhibit D | zlz matkak: Se. of WINDOWS:

THOMAS CONSTRUCTION MANUFACTURES OUR OWN COMPOSIT WINDOW, OUR HOME OWNERS HAVE NOTICED THAT OUR WINDOWS HAVE SAVED THEM 35-55% OFF THEIR ENERGY BILLS AND OUR WINDOWS SYSTEM WILL PAY FOR THEMSELVES IN ENERGY SAVINGS ALONE WITHIN 8 YEARS OR WE WILL PAY THE DIFFERENCE! WHAT THIS MEANS TO OUR HOME OWNERS! OUR WINDOWS ARE FREE!!! THAT’S THE THOMAS PROMISE!!! DO YOU WORK DURING THE DAY OR EVENINGS? THE REASON I ASK IS BECAUSE WHAT WE WOULD LIKE TO DO IS SHOW YOU WHAT WE HAVE TO OFFER AND ANSWER ANY QUESTIONS YOU MAY HAVE AND LEAVE YOU WITH A COST FREE NO OBLIGATION ESTIMATE.

IT HAVE AN APPOINTMENT AVAILABLE TOMORROW @ WHICH WOULD BE BETTER FOR YOU? (ABC) ALWAYS BE CLOSING! (GO TO BUTTON UP) THV 1446 VOLUME 153 Complaint Exhibit E THV HOLDINGS LLC 943 Complaint Exhibit F LOWER ENERGY BILLS & INCREASE YOUR COMFORT WITH THV REPLACEMENT WINDOWS 0 50 Year Warranty 0 40% Fuel Savings @ Easy to clean = Maintenance free tilt-in feature inside and out THV GUARANTEES IN WRITING...

Our windows will pay for themselves in utility bills alone or we will pay you the difference.

}FREE INSTALL = WITH PURCHASE OF 5 OR MORE WINDOWS (Offer Ends in 30 Days. Ono offer par household. Not valid with any other offer or sales CALL FOR YOUR FREE ESTIMATE nz (800) 160.31 Ad LOCALLY OPERATED VOLUME 153 Complaint Relax with the safety and convenience of MAINTENANCE-FREE GUTTERS ® Diverts leaves and debris @ Prevents mold growth = Prevents mosquito breeding = Resistant to fading from the sn and cleaning solvents @ Prevents termite damage = Protects your home against foundation and landscape damage = Keeps you safe from climbing to clean gutters THV is the exclusive supplier of:

CLEARBWATER Gutter Protection System valid with any other offer or sshas.

ADD VALUE AND CURB APPEAL WITH SIDING oe |°99 OFF (9-8 MF 9-4 Sat, Sun. by appt. a = PerSquare | CALL FOR YOUR FREE ESTIMATE. FINANCING AVAILABLE (BOG) 46023129 eB wom THV HOLDINGS LLC 945 Complaint Exhibit G IT’S A GREAT TIME TO REPLACE WINDOWS! Up to 40% FUEL SAVINGS 25% OFF AIRST 25 CALLERS GET FREE INSTALLATION (te moe acts. Meat sachet ang rien aor after 33% OFF ALL OTHER PRODUCTS (Cer agen: gr Poot add veth ang cas ioe aorta lr CALL: FOR YOUR FREE ESTIMATE aigrvaue SHOWROOM 800-460-3135 Bowing Green CLICK: werw.thvstores.com ee ee PAY JULY 2040 Trve Home Value, tne.

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THY Ceiiicd Home Remodeler THY 0842 CUSTOMER ACTIVATION RECEIPT THV Com pozit* Fill com and to THY Comporit Windows & Dear withia 30 days of ‘ Windows & Coors: {pour complried inetallatinn go; THY [A> Box 740, Louleville, KY 40292 bead To Phin: Number of Linirs Urrstalled PledgeOoeret Na Residence Sareet Address Canbract # Dee: Effective Clw Sac Zip Dante Erecalled Dale Certified Home Remodeler (Installer) Date 1 DEALER ACTIVATION RECEWT | THY Com pozit Fill com and return ip THY Compocit Windows & Door: with copy of Windows & Doors epproved oommel oa: THY PO Boi 34745, Louie BY 4027 beurd To Pome # Number of Unite brestalled PledgesCoanct Nie, Residence Soci Ackirces Costract & Dinter Effective City State Zip Date Installed Sionatare Tenn

THV HOLDINGS LLC 951 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 a Complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued, would charge the respondent with violation of the Federal Trade Commission Act; and The respondent 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 complaint, a statement that the signing of the agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated as alleged in such complaint, or that any of the facts as alleged in such complaint, other than jurisdictional facts, are true, 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 Federal Trade Commission Act, and that a 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 thirty (30) days for the receipt and consideration of public comments, and having duly considered the comments received from interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, 16 C.F.R. § 2.34, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent THV Holdings LLC (“THV Holdings”) is a Delaware limited liability company with its principal office or place of business at 5611 Fern Valley Road, Louisville, Kentucky 40228.

VOLUME 153 Decision and Order 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:

A. “Clearly and prominently” means 1. In print communications, the disclosure shall be presented in a manner that stands out from the accompanying text, so that it is sufficiently prominent, because of its type size, contrast, location, or other characteristics, for an ordinary consumer to notice, read and comprehend it; 2. In communications made through an electronic medium (such as television, video, radio, and interactive media such as the Internet, online services, and software), the disclosure shall be presented simultaneously in both the audio and visual portions of the communication. In any communication presented solely through visual or audio means, the disclosure shall be made through the same means through which the communication is presented. In any communication disseminated by means of an interactive electronic medium such as software, the Internet, or online services, the disclosure must be unavoidable. Any audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. Any visual disclosure shall be presented in a manner that stands out in the context in which it is presented, so that it is sufficiently prominent, due to its size and shade, contrast to the background against which it appears, the length of time it appears on the screen, THV HOLDINGS LLC 953 Decision and Order and its location, for an ordinary consumer to notice, read and comprehend it; and 3. Regardless of the medium used to disseminate it, the disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any communication.

B. “Close proximity” means on the same print page, web page, online service page, or other electronic page, and proximate to the triggering representation, and not accessed or displayed through hyperlinks, pop-ups, interstitials, or other means.

C. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44. D. “Competent and reliable scientific evidence” shall mean tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons, that are generally accepted in the profession to yield accurate and reliable results, and that are sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that a representation is true. E. “Covered product or service” means any fenestration product, any component thereof, and any product or any service for which respondent makes any claim about energy savings, energy costs, energy consumption, U-factor, SHGC, R-value, K-value, insulating properties, thermal performance, or energyrelated efficacy.

F. “Fenestration product” means any window, sliding glass door, or skylight.

G. “K-value” is a measure of a material’s thermal conductivity.

VOLUME 153 Decision and Order H. Unless otherwise specified, “respondent” shall mean THV Holdings LLC, its successors and assigns, and its officers, agents, representatives, and employees. I. “R-value” is a measure of a material’s resistance to heat flow.

J. “SHGC” means solar heat gain coefficient, which is the fraction of incident solar radiation admitted through a window, both directly transmitted and absorbed and subsequently released inward. K. “U-factor” is a measure of the rate of heat loss. I.

IT IS ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any covered product or service in or affecting commerce, shall not make any representation, directly or indirectly, expressly or by implication, including through the use of endorsements or trade names that: A. Consumers who replace their windows with respondent’s windows achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs; or B. Respondent guarantees or pledges that consumers who replace their windows with respondent’s windows will achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs;

unless the representation is non-misleading and, at the time of making such representation, respondent possesses and relies upon competent and reliable scientific evidence to substantiate that all or almost all consumers are likely to receive the maximum represented savings or reduction.

THV HOLDINGS LLC 955 Decision and Order Provided, however, that if respondent represents that consumers who replace their windows with respondent’s windows achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs under specified circumstances, or if respondent guarantees or pledges up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs under specified circumstances, it must disclose those circumstances clearly and prominently in close proximity to such representation, guarantee, or pledge and it must substantiate that all or almost all consumers are likely to receive the maximum represented, guaranteed, or pledged savings or reduction under those circumstances (e.g., when replacing a window of a specific composition in a building having a specific level of insulation in a specific region). II.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any covered product or service in or affecting commerce, shall not make any representation, directly or indirectly, expressly or by implication, including through the use of endorsements or trade names: A. About the ability of respondent’s windows to pay for themselves in energy savings alone within any specific number of years or other time period, when consumers replace their windows with respondent’s windows; B. That any specific number or percentage of consumers who replace their windows with respondent’s windows achieve energy savings or reduction in heating and cooling costs; or C. About energy consumption, energy savings, energy costs, heating and cooling costs, U-factor, SHGC, Rvalue, K-value, insulating properties, thermal performance, or energy-related efficacy of any covered product or service;

VOLUME 153 Decision and Order unless the representation is non-misleading and, at the time of making such representation, respondent possesses and relies upon competent and reliable scientific evidence to substantiate that such representation is true.

III.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any covered product or service in or affecting commerce, shall not provide to others the means and instrumentalities with which to make, directly or indirectly, expressly or by implication, including through the use of endorsements or trade names, any false, unsubstantiated, or otherwise misleading representation of material fact. For the purposes of this Part, “means and instrumentalities” shall mean any information, including, but not necessarily limited to, any advertising, labeling, telemarketing scripts, or promotional, sales training, or purported substantiation materials, for use by trade customers in their marketing of any covered product or service, in or affecting commerce. IV.

IT IS FURTHER ORDERED that respondent THV Holdings, and its successors and assigns, within thirty (30) days of the issuance of this order, must:

A. Establish and implement a training program for all principals, officers, directors, managers, employees, agents, and representatives who direct or engage in the promotion or sale of any covered product or service; B. Designate a manager to coordinate and oversee the implementation of this training program; C. Require all current principals, officers, directors, managers, employees, agents, and representatives who direct or engage in the promotion or sale of any covered product or service to complete the training program within sixty (60) days of the order’s issuance, THV HOLDINGS LLC 957 Decision and Order and require all future principals, officers, directors, managers, employees, agents, and representatives to complete the training program before directing or engaging in the promotion or sale of any covered product or service;

D. Ensure that the training program addresses: 1. the trainee’s duty not to use or make any representation prohibited under this order; 2. all representations specifically approved by the respondent concerning energy savings, reduction in heating and cooling costs, and any other energyrelated attribute of any covered product or service; and 3. the trainee’s duty not to use or make any representation concerning energy savings, reduction in heating and cooling costs, or any other energy-related attribute of any covered product or service unless the respondent has authorized the representation after the order’s issuance; E. Secure from each participant in this training program, at the conclusion of training, a signed statement acknowledging that he or she has completed the program;

F. Maintain and upon request make available to the Federal Trade Commission for inspection and copying all acknowledgments obtained pursuant to this Part, as well as a copy of all materials used in training pursuant to this Part; and G. Regularly evaluate and adjust its training program in light of any material changes to respondent’s promotional materials, operations, or any other circumstances that respondent knows or has reason to know may have a material impact on the effectiveness of the training program required pursuant to this Part. VOLUME 153 Decision and Order V.

IT IS FURTHER ORDERED that respondent THV Holdings, and its successors and assigns, shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All advertisements and promotional materials containing the representation;

B. All materials that were relied upon in disseminating the representation; and C. All tests, reports, studies, surveys, demonstrations, or other evidence in its possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

VI.

IT IS FURTHER ORDERED that respondent THV Holdings, and its successors and assigns, shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having supervisory responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order. Respondent shall deliver this order to such current personnel within thirty (30) days after the date of service of this order, and to such future personnel within thirty (30) days after the person assumes such position or responsibilities. Respondent shall maintain and upon request make available to the Federal Trade Commission for inspection and copying all acknowledgments of receipt of this order obtained pursuant to this Part.

THV HOLDINGS LLC 959 Decision and Order VII.

IT IS FURTHER ORDERED that respondent THV Holdings, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation that may affect compliance obligations arising under this order, including but not limited to a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. Unless otherwise directed by a representative of the Commission in writing, all notices required by this Part shall be emailed to [email protected] or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: “THV Holdings LLC, File No. 112 3057, Docket No. C-4361.”

VIII.

IT IS FURTHER ORDERED that respondent THV Holdings, and its successors and assigns, within sixty (60) days after the date of service of this order, shall file with the Commission a true and accurate report, in writing, setting forth in detail the manner and form of its own compliance with this order. Within ten (10) days of receipt of written notice from a representative of the Commission, it shall submit additional true and accurate written reports.

IX.

This order will terminate on May 16, 2032, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any VOLUME 153 Analysis to Aid Public Comment violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Part in this order that terminates in less than twenty (20) years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this Part.

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. By the Commission, Commissioner Rosch and Commissioner Ohlhausen not participating.

ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from THV Holdings LLC, a limited liability company (“respondent”).

The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will THV HOLDINGS LLC 961 Analysis to Aid Public Comment decide whether it should withdraw from the agreement or make final the agreement’s proposed order.

This matter involves respondent’s marketing and sale of replacement windows for use in residences. According to the FTC complaint, respondent represented that its windows likely pay for themselves in energy savings alone within eight years, when consumers replace their windows with THV Compozit windows with Alter-Lite® triple pane glass. The respondent also allegedly represented that consumers who replace their windows with these THV windows are likely to achieve residential energy savings of 40%, save 40% on residential heating and cooling costs, or reduce their energy bills by half. In addition, the respondent allegedly represented that homeowners have saved 35%-55% off their energy bills by replacing their windows with THV windows. According to the complaint, respondent did not possess and rely upon a reasonable basis substantiating these representations when it made them. Many factors determine the savings homeowners can realize by replacing their windows, including the home’s geographic location, size, insulation package, and existing windows. Consumers who replace single or double-paned wood or vinyl-framed windows – common residential window types in the United States – with THV replacement windows are not likely to achieve a 40%, 50%, or 35%-55% reduction in residential energy consumption or heating and cooling costs. The complaint also alleges that, by providing its independent dealers and installers with advertising and other promotional materials making the above unsubstantiated representations, respondent provided the means and instrumentalities to engage in deceptive practices. Thus, the complaint alleges that respondent engaged in unfair or deceptive practices in violation of Section 5(a) of the FTC Act. Some promotional materials challenged in the FTC’s complaint include the words “up to” in an apparent attempt to qualify representations that consumers who replace windows with respondent’s windows are likely to achieve specified amounts of residential energy savings or reduction in residential heating and cooling costs. In the context of specific ads in this case, the words “up to” do not effectively qualify such representations for replacement windows. The FTC’s complaint and the proposed VOLUME 153 Analysis to Aid Public Comment consent order should not be interpreted as a general statement of how the Commission may interpret or take other action concerning representations including the words “up to” for other products or services in the future.

The proposed consent order contains three provisions designed to prevent respondent from engaging in similar acts and practices in the future. Part I addresses the marketing of windows. It prohibits respondent from making any representation that: (A) consumers who replace their windows with respondent’s windows achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs; or (B) respondent guarantees or pledges that consumers who replace their windows with respondent’s windows will achieve up to or a specified amount or percentage of energy savings or reduction in heating and cooling costs; unless the representation is non-misleading and, at the time of making such representation, respondent possesses and relies upon competent and reliable scientific evidence to substantiate that all or almost all consumers are likely to receive the maximum represented savings or reduction. Further, if respondent represents, guarantees, or pledges that consumers achieve such energy savings or heating and cooling cost reductions under specified circumstances, it must: disclose those circumstances clearly and prominently in close proximity to such representation, guarantee, or pledge; and substantiate that all or almost all consumers are likely to receive the maximum represented, guaranteed, or pledged savings or reduction under those circumstances (e.g., when replacing a window of a specific composition in a building having a specific level of insulation in a specific region). The performance standard imposed under this Part constitutes fencing-in relief reasonably necessary to ensure that any future energy savings or reduction claims are not deceptive. Parts II and III address any product or service for which respondent makes any energy-related efficacy representation. Part II prohibits respondent from making any representation: (A) about the ability of respondent’s windows to pay for themselves in energy savings alone within any specific number of years or other time period, when consumers replace their windows with respondent’s windows; (B) that any specific number or percentage of consumers who replace their windows with respondent’s THV HOLDINGS LLC 963 Analysis to Aid Public Comment windows achieve energy savings or reduction in heating and cooling costs; or (C) about energy consumption, energy savings, energy costs, heating and cooling costs, U-factor, solar heat gain coefficient, R-value, K-value, insulating properties, thermal performance, or energy-related efficacy; unless the representation is non-misleading and substantiated by competent and reliable scientific evidence. Part III prohibits respondent from providing to others the means and instrumentalities with which to make any false, unsubstantiated, or otherwise misleading representation of material fact. It defines “means and instrumentalities” to mean any information, including any advertising, labeling, or promotional, sales training, or purported substantiation materials, for use by trade customers in their marketing of any such product or service.

Parts IV though VIII require respondent to: train personnel who direct or engage in the promotion or sale of any product or service covered by the order not to make representations prohibited by the order; keep copies of advertisements and materials relied upon in disseminating any representation covered by the order; provide copies of the order to certain personnel, agents, and representatives having supervisory responsibilities with respect to the subject matter of the order; notify the Commission of changes in its structure that might affect compliance obligations under the order; and file a compliance report with the Commission and respond to other requests from FTC staff. Part IX provides that the order will terminate after twenty (20) years under certain circumstances. The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the complaint or the proposed order, or to modify the proposed order’s terms in any way. VOLUME 153 Complaint