Eco-Friendly Claims Go Unchecked
The federal watchdog that's supposed to crack down on product labels that make false environmental claims has taken almost no enforcement action over the last decade, even as "green" marketing claims have exploded, agency records show.
Companies touting eco-friendly products or biodegradable packaging are supposed to abide by guidelines issued by the Federal Trade Commission in 1992. The FTC can take companies that ignore the so-called "Green Guides" to court and seek fines to reimburse consumers.
Since May 2000, the FTC has taken legal action against only three companies for violating the guidelines. All three complaints were announced June 9, the day of a congressional hearing about environmental marketing.
"There has been little to no enforcement of the 1992 guides," says environmental consultant Kevin Tuerff, whose company started a website aimed at exposing ads with questionable environmental claims. "They need to pick up the pace."
From 1992 to 2000, the FTC generally filed two or more complaints a year, but enforcement dropped off under President Bush.
The FTC's James Kohm acknowledges the agency hasn't aggressively enforced its main environmental guidelines in recent years, in part because of a lack of resources.
The agency has, however, cracked down on energy-related claims, such as products that purport to raise a car's gas mileage, he says.
The FTC "is a small agency with a huge mission and ... very limited resources," he says. The 2009 budget for the FTC, which also fights identity theft, credit fraud and monopolies, was $259 million.
More new cases like those announced earlier in the month are to be expected, Kohm says.
The companies cited by the commission June 9 improperly advertised their products as "biodegradable." All three cases were filed May 20.
Environmental marketing has exploded recently: a survey in the last year by environmental marketer TerraChoice of 12 large U.S. stores found more than 1,700 products that boasted of green credentials. Eco-friendly claims are made by items ranging from liquor to sport-utility vehicles to pesticides.
One-third of consumers rely on labels to decide whether a product is environmentally friendly, says Suzanne Shelton, whose firm polled Americans this spring on their green-buying habits.
"If the FTC isn't regulating that, then consumers are possibly being sold a bill of goods," she says.