Markets Wired

The Federal Trade Commission reached an agreement that will put an end to the deceptive tactics of a company that allegedly sold worthless environmental certifications for hundreds of dollars, and falsely told more than 100 customers that its certifications were endorsed by two independent firms – which it actually owned. The FTC settlement bars Tested Green and its owner Jeremy Ryan Claeys from making misrepresentations when selling any product.

“It’s really tough for most people to know whether green or environmental claims are credible,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Legitimate seals and certifications are a useful tool that can help consumers choose where to place their trust and how to spend their money. The FTC will continue to weed out deceptive seals and certifications like the one in this case.”

According to the FTC, between February 2009 and April 2010, Tested Green and Claeys advertised, marketed, and sold environmental certifications using both the website www.testedgreen.com and mass e-mails to prospective consumers. The company’s marketing claimed that Tested Green was the “nation’s leading certification program with over 45,000 certifications in the United States.”

The FTC complaint alleges, however, that Tested Green never tested any of the companies it provided with environmental certifications, and would “certify” anyone willing pay a fee of either $189.95 for a “Rapid” certification or $549.95 for a “Pro” certification. After customers paid, Tested Green gave them its logo and the link to a “certification verification page” that could be used to advertise their “certified” status. The agency charged that the respondents violated the FTC Act by providing the means to deceive consumers.

The FTC also alleges that Tested Green deceived consumers by citing its endorsements from the National Green Business Association and the National Association of Government Contractors – implying that these were independent organizations when, in fact, both are owned and operated by Claeys.

The proposed order settles the FTC’s charges against Nonprofit Management LLC and Jeremy Ryan Claeys, both also doing business as Tested Green. It prohibits them from misrepresenting that:

• an outside party has evaluated a product, service, package, or program based on its environmental attributes;
• that they have or a third party has the expertise to evaluate the environmental benefits or attributes of a product, service, package, or program;
• the number of certifications they have issued; and
• that a product, package, certification, service, package, or program is endorsed by any person or organization.

The order also bars Tested Green and Claeys from helping anyone else make false or misleading statements in connection with any of the conduct described above, and bars them from making any representations about a user or endorser unless they clearly and prominently disclose any connection they have with the endorser if one exists. The proposed order also contains reporting obligations and other provisions to ensure compliance with its terms. It will expire in 20 years.

The Commission vote approving the administrative complaint and proposed settlement order was 5-0. The order will be subject to public comment for 30 days, until February 11, 2011, after which the Commission will decide whether to make it final. Written comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments can be filed electronically at http://ftcpublic.commentworks.com/ftc/testedgreen.

NOTE: The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondents have violated the law. A consent order is for settlement purposes only and does not constitute an admission of a violation of the law. When the Commission issues an 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.

Copies of the proposed consent agreement and order are available from the FTC’s website at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC works for the consumer 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, click: http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://ftc.gov/bcp/consumer.shtm.

(FTC File No. 1023064)
(Tested Green.final.wpd)