Markets Wired

At the request of the Federal Trade Commission, a federal court has ordered a light bulb manufacturer and its owners to pay more than $21 million for misleading consumers by exaggerating the performance of their Light Emitting Diode (LED) light bulbs.

In September 2010, the FTC charged Lights of America Inc., Usman Vakil and Farooq Vakil with violating federal law by overstating the light output and life expectancy of their LED bulbs on packages and in brochures, and falsely comparing the brightness of their LED bulbs with that of other light bulbs.

Following a four-day bench trial in October-November 2012, the court entered detailed findings of the defendants’ false and deceptive claims. Prior to trial, the court had already found that the defendants made unsupported claims that their LED bulbs provided the same or comparable light output as incandescent bulbs.

According to the FTC, the defendants initially claimed their LED lamps had a 30,000-hour life and lasted “15 times longer than 2,000 hour incandescent bulbs.” The defendants revised those claims downward several times, including a statement that their LED lamps had a 12,000-hour life and lasted “6 times longer than 2,000 hour incandescent bulbs.” But in fact, the documents and data the defendants relied upon showed that none of their LED bulbs that were tested lasted beyond a few thousand hours.

In September 2013, the court found that the FTC had proved its case and that the defendants were liable for deceptive marketing. The court order announced today requires them to pay $21 million to the FTC, which represents the total amount consumers paid to the company for light bulbs based on the deceptive claims. Most of the money will be available for refunds to consumers. The court order permanently prohibits the defendants from misrepresenting material facts about lighting products, and misrepresenting light output or brightness in lumens, light output equivalency to another product, lifetime of the product, energy costs, energy savings, or energy consumption, or the ability to produce a desired energy-related effect. The order also requires the defendants to meet certain compliance and record-keeping requirements for 20 years.

The judgment was entered by the U.S. District Court for the Central District of California, Southern Division, on January 15, 2014.

For information about light bulb performance, read the FTC’s Shopping for Light Bulbs, which notes that well-designed and manufactured LED bulbs save on energy costs and last much longer than other types of light bulbs.

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, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.