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

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 Brands, Inhabitat 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]