A previous post discussed a recent court decision giving the U.S. Federal Trade Commission (FTC) a big win and holding that Lights of America (LOA) violated Section 5 of the FTC Act by making false claims about LED lamps replacing certain wattage incandescent lamps and about the lifetime of the company’s LED lamps.
At issue were LOA’s “replacement” claims and “lifetime” claims. The replacement claims stated that certain LED lamps replace 20-, 40-, and 45-watt incandescent light bulbs and indicated that the lamps produce the lumen equivalent of each compared incandescent.
The lifetime claims included statements by LOA that certain lamps last six, seven, ten, and even fifteen times longer than 2,000 hour incandescent bulbs, for a maximum claimed 30,000 hours of life.
The court found both LOA’s “replaces watts” claims and its LED lifetime claims false and unsubstantiated and constituted violations of Section 5(a) of the FTC Act.
The court has now issued a Final Judgment and Order imposing an injunction that prohibits LOA from making any misrepresentations about its LED products relating to four categories of product features:
(1) Light output or brightness in lumens;
(2) Light output equivalency to incandescent or any general service lamp;
(3) Lifetime of the product; or
(4) Energy costs, energy savings, energy consumption, or energy-related efficacy.
If LOA is to make any such claims they must be backed up by “competent and reliable evidence that substantiates that the representation is true.”
The decision also includes a substantial monetary judgment, ordering LOA to pay the FTC $21,165,863.47. This is the amount the court determined represented the injury to consumers or LOA’s unjust enrichment resulting from its violations of the FTC Act.
The court directed the FTC to deposit the money into a redress fund to be used for consumer redress, and if not practicable or there are funds left over, to use the remaining money for equitable relief reasonably related to LOA’s deceptive practices.
Any money left after that, the court said, will be deposited to the U.S. Treasury as disgorgement, which could come in handy should Congress fail to raise the debt ceiling next week and the government default on its debt obligations.