Markets Wired

For the second time this year, the Federal Trade Commission has settled charges that a company that markets plastic lumber and related products misled consumers regarding the environmental attributes of its products.

Under the FTC proposed settlement, the company, American Plastic Lumber, Inc. (APL), is prohibited from making misleading statements about the amount of post-consumer recycled plastic content in its products or other environmental benefit claims and must have competent and reliable evidence to support any such claims.

“The FTC takes environmental marketing very seriously, and works hard to ensure that consumers are not misled when it comes to ‘green’ claims,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “Businesses should consult the FTC’s Green Guides to understand what environmental clams they legally can and cannot make.”

APL is a California corporation, based in Shingle Springs, CA. It distributes plastic lumber products, such as picnic tables, benches, trash bins, wheel stops, and speed bumps, to end-use consumers and businesses in the construction industry.

In its administrative complaint, the FTC alleges that from at least June 2011 through June 2013, APL’s advertisements and marketing materials implied that its products – and the recycled plastics they contain – were made virtually all out of post-consumer recycled content such as milk jugs and detergent bottles. The complaint states that these claims were deceptive and misleading, and that in reality the products contained less than 79 percent post-consumer content, on average.

In addition, the complaint states, about eight percent of APL’s products contained no post-consumer recycled content at all, and nearly seven percent of the products were made with only 15 percent post-consumer content. These deceptive and unsubstantiated claims, the complaint concludes, violate Section 5 of the FTC Act, which prohibits deceptive acts or practices in commerce.

The proposed consent order prohibits APL from making deceptive claims regarding environmental benefits for any product or package. The terms of the settlement are similar to those in the first case the FTC brought related to unsubstantiated “green” lumber claims. That case, against N.E.W. Plastics Corp., was announced in February 2014. The Commission issued the final complaint and order in April 2014.

Specifically, the proposed order prohibits APL from making representations about the recycled content, post-consumer recycled content, or any other environmental benefit of its products or packaging unless they are true, not misleading, and can be substantiated by competent and reliable evidence.  It also provides that if, in general, experts in the relevant scientific field would conclude it necessary, such evidence must be competent and reliable scientific evidence.

It further requires APL to substantiate any recycled-content claims by demonstrating that the content is made of materials that were recovered from the waste stream. Finally, the proposed order requires APL to maintain and make available to the FTC for five years all of its advertising and promotional material making claims covered by the order, materials it relied upon in making such claims, as well as any tests, reports, studies, surveys or other evidence that contradicts or calls into question any environmental claims it makes. The order will expire in 20 years.

Information for Consumers

The FTC has information for consumers about green lumber claims in a blog post on its website. The agency also provides detailed guidance to businesses on environmental claims in its Green Guides.

The Commission vote to issue the complaint and proposed consent was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through July 21, 2014, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

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 that a proceeding is in the public interest. 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, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.