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Thursday, June 11, 2009

FTC Cracking Down on Greenwashing

The Federal Trade Commission (FTC) is finally cracking down on greenwashing. The FTC charged three companies (Kmart, Tender Corp., Dyna-E International) with making false claims about paper products labeled "biodegradable" during testimony before the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce.

Kmart labeled its American Fare brand paper plates "biodegradable," but agreed to remove the label. Tender Corp. labeled its Fresh Bath brand wipes "biodegradable," and Dyna-E International labeled its paper towels "biodegrabable." Tender also agreed to remove the label "biodegradable" from its products. The case against Dyna-E International will enter into administrative litigation.

Appearing before the House Subcommittee, James A. Kohm, Associate Director of the Enforcement Division in the Bureau of Consumer Protection at the FTC, said the FTC "alleged that the companies could not substantiate that their products would decompose into elements found in nature within a reasonably short period of time after customary disposal." Kohm said the "substantial majority" of the products, after being used, end up "disposed in landfills, incinterators, and recycling facilities."

The FTC said in its complaints, "American Fare paper plates will not completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time because a substantial majority of total municipal solid waste is disposed of by methods that do not present conditions that would allow for American Fare paper plates to completely break down."

During Kohm's testimony he mentioned the FTC filed charges against other companies, including home insulation companies for "overstating theinsulating properties of their products." He also mentioned that the FTC took action against companies marketing a devices which they claim "dramatically increase gas mileage in ordinary cars."

Since 1992, the FTC has published "Green Guides" about green marketing. Last year it held three workshops about how to better protect consumers from deceptive marketing, including greenwashing.

1 comment:

  1. By FTC regulations and cracking down on these companies we will see more green and environmental companies, check out this bank for instance where you can invest in green stocks and do something for the environment.