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Green Building Deception: Home Insulation Marketer Fined $350,000

Leon Kaye | Friday February 1st, 2013 | 8 Comments
green building, home insulation, r-value, Edward Sumpolec, Federal Trade Commission, FTC, Leon Kaye, Home Star Act, Environmate, Meyer Enterprises, fraud, insulation, home energy efficiency retrofits

Need home insulation? Know your R-value

With home energy efficiency retrofits still going strong and proving to be a lucrative business, opportunities for fraud arise as in any sector. And yesterday, the Federal Trade Commission fined a home insulation marketer $350,000 for making unsubstantiated claims about the products he and his companies had made to consumers. The U.S. Department of Justice won the order on the merit of the FTC’s case without having to to go to trial.

Edward Sumpolec of Palm Bay, FL, who conducted business under three different entities, was found in violation of an FTC rule that requires sellers to provide an accurate R-value, the measure of a material’s resistance to heat flow, on their products. According to the FTC, the R-value is supposed to give consumers accurate information about the correct level of insulation needed for their homes–the higher the R-value, the higher the insulating power. Sumpolec, however, had sold products such as “R-100 paint,” and other insulating products that promised to reduce roof temperatures by as much as 95 degrees and save up to 60 percent on energy bills.

According to the FTC, Sumpolec lacked any “reasonable basis” for such cost-saving claims, did not retain any material records for the required amount of time and sold products to customers without including accurate fact sheets about such products’ performance. A local commercial still posted on YouTube touts energy efficiency amongst the various products Sumpolec sold with a warning for customers “not to scrimp and save on energy and a buck here and there.” A quick point: a cursory search at a local Home Depot or on the retailer’s web site reveals that the most energy efficient insulation has an R-value between 49 and 60.

Sumpolec was hardly alone in making false claims about energy efficient building products. Meyer Enterprises was ordered by an Illinois federal court to pay $155,000 for selling an insulation barrier with the claim that it had an R-value almost 4 times of its actual performance. Environmate of Alabama sold a similar product that had an R-value half of what the company had disclosed to customers.

And so we have an easy lesson here: consumers have got to learn the jargon if they participate in any program such as the the Home Star Act of 2010 or are vetting local contractors. And any business owner too dismissive about compliance may want to take notes on Sumpolec’s fate–he has thirty days to pay that fine and is now subjected to a bevy of documentation requirements.

Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable BrandsInhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). He will explore children’s health issues in India next month with the International Reporting Project.

[Image credit: Lowe's]


▼▼▼      8 Comments     ▼▼▼

Categorized: Green Building|

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  • Jim T

    I wonder when they will go after the window replacement companies that claim savings of 40% of your energy cost just by replacing windows- never revealing that the frame is never
    changed and still leaks as much energy as ever.

    • Don B.

      I’m a window distributor, and always tell my contractors to read the small print. Many window companies claim the high R value because they are center of glass, not the overall window. Most wood window companies say in their sweet catalogs how the R rating (now the U Rating) is figured. The companies I deal with, and have sold for over 25 years give honest U values based upon the overall performance.
      You are right without replacing the entire window back to the frame, they are going have air leaks.

  • Paul Lesieur

    %

    This is the beginning of exposing just how green or efficient products are and its about time. I have a competitor who is selling windows that will reduce heating costs by 60%.

    I tell people that windows don’t lose 60% of their heat so the claim is suspect. Regardless he has testimonials from people saying his 3 pane vinyl windows saved them up to 75% off their heating bill.
    Maybe all he did was close his customers windows. :-)

  • http://www.HomeTips4Women.com tinagleisner

    This is the tip of the iceberg as homeowners aren’t used to researching many of the products they buy for their home, beyond the price. Even with Energy Star labels, it still takes some math to calculate the ROI over X years and who’s got the time or patience.

    I agree it’s pretty scary because if you added up all the energy savings claims people give, then we should be getting refunds for using less than zero percent … ha, ha. Thanks for this warning & I’ll be sharing with my readers.

  • http://www.facebook.com/steve.knaub Steve Knaub

    When it comes to understanding building products, or dealing with unscrupulous contractors, you’re better off using an architect.

    • R. Sorensen

      Are you saying all contractors are unscrupulous??? I know a few unscrupulous architects.

    • http://www.facebook.com/steve.knaub Steve Knaub

      No, Sorensen, not an all-statement. I whole-heartedly agree there are also unscrupulous architects – as there are doctors or lawyers or police officers or whatever. However, there is less censure recourse for the myriad contractors that come and go, compared to architects that put a great deal of effort into becoming licensed professionals and do not want to have that stripped from them. So, one should do their homework in hiring a good architect for AT LEAST their product knowledge and the reasons below related to contractors.

      I try to only work with highly competent and honest contractors. But when you and your client work with someone you don’t know, or are forced to work with a known bad actor by a public bid process, an expert and a good set of standard agreements provide a much better safety net than signing on to the contractor’s terms.

      Good architects bring other value to a project, too. Sometimes our recommendations can save a lot of construction dollars. It doesn’t happen often, but I had a project three years ago where my recommendations saved the client more than four times my fee!

  • TedKidd

    If people could see past results, and ability of contractors to deliver on projected savings, would that possibly change the way people approach Energy Efficiency?

    For example, if the energy results of these contractors were posted, along with the PROJECTED savings, you’d have a register and understanding of what to expect with respect to lies/truth/incompetence/competence of contractors.

    This representation of contractor ability to hit leakage reduction targets makes a nice example: http://bit.ly/bdvariancepercent

    People simply want to know that they are going to get what they are promised. If there is no tracking and transparent disclosure of results, there is no way to understand ability to deliver.