[Federal Register Volume 65, Number 65 (Tuesday, April 4, 2000)]
[Notices]
[Pages 17659-17660]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8244]


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FEDERAL TRADE COMMISSION

[Docket No. 9292]


Dura Lube Corporation, et al.; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the complaint that 
the Commission issued in April 1999 and the terms of the consent 
order--embodied in the consent agreement--that would settle these 
allegations.

DATES: Comments must be received on or before April 28, 2000.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Elaine Kolish or Heather Hippsley, 
FTC/S-4302, 600 Pennsylvania Ave., NW, Washington, DC 20580. (202) 326-
3042 or 326-3285.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 3.25(f) of 
the Commission's Rules of Practice, 16 CFR 3.25(f), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for March 29, 2000), on the World Wide Web, at ``http://www.ftc.gov/
ftc/formal.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW, 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments or views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement for entry of a consent order from Dura Lube 
Corporation, Inc., American Direct Marketing, Inc., Howe Laboratories, 
Inc., Crescent Marketing, Inc. (d/b/a Crescent Manufacturing, Inc.), 
National Communications Corporation, The Media Group, Inc., and Herman 
S. Howard and Scott Howard, the principals who control these 
corporations (referred to collectively as ``Respondents''). The 
agreement would settle a complaint by the Federal Trade Commission that 
Respondents engaged in unfair or deceptive acts or practices in 
violation of section 5(a) of the Federal Trade Commission Act.
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    This matter concerns advertising representations made about Super 
Dura Lube Engine Treatment and Advanced Dura Lube Engine Treatment 
(referred to collectively as ``Dura Lube''), engine oil additives. The 
administrative complaint alleged that Respondents violated the FTC Act 
by disseminating ads that made unsubstantiated performance claims about 
Dura Lube. The Complaint alleged that Respondents represented that, 
compared to motor oil alone or oil treated with any other product, Dura 
Lube: (1) Reduces engine wear; (2) reduces engine wear by more than 
50%; (3) prolongs engine life; (4) reduces emissions; (5) reduces the 
risk of serious engine damage when oil pressure is lost; (6) improves 
gas mileage; and (7) improves gas mileage by up to 35%. The Complaint 
alleged that one treatment continues to protect engines for up to 
50,000 miles. The Complaint alleged that Respondents represented that 
they had a reasonable basis for making these claims, but in fact did 
not possess competent evidence supporting them.
    The Complaint also challenged, as false, claims that tests prove 
that, compared to motor oil alone, Dura Lube: (1) Reduces engine wear; 
(2) prolongs engine life; (3) reduces emissions; (4) reduces the risk 
of serious engine damage when oil pressure is lost; (5) improves gas 
mileage; and (6) improves gas mileage by up to 35%. The Complaint also 
challenged as false claims that tests prove that one treatment 
continues to protect engines for up to 50,000 miles. Additionally, the 
Complaint challenged, as false, claims that Dura Lube: (a) Has been 
tested by the U.S. Environmental Protection Agency; and (b) contains no 
chlorinated compound.
    The Complaint alleged that Respondents represented that product 
demonstrations in their advertising proved, demonstrated, or confirmed 
that, (1) compared to motor oil alone, Dura Lube reduces the risk of 
serious engine damage when oil pressures is lost, and (b) without Dura 
Lube, motor oil fails to protect automobile engines under hot running 
conditions, when in fact the demonstrations do not prove, demonstrate, 
or confirm these product attributes. Finally, the Complaint alleged 
that Respondents represented that former astronaut Charles ``Pete'' 
Conrad had endorsed the product based on a valid exercise of his 
expertise in

[[Page 17660]]

the evaluation of automobile engine lubricants, when in fact Mr. Conrad 
did not have expertise in the evaluation and testing of automobile 
engine lubration.
    The Complaint gave notice that the Commission had reason to believe 
that a proceeding under section 19 of the FTC Act for consumer redress 
ultimately might be appropriate, depending upon the adjudicative record 
and other relevant factors.
    The proposed consent order contains provisions designed to prevent 
Respondents from engaging in acts and practices similar to those 
alleged in the complaint in the future. Part I of the proposed consent 
order prohibits Respondents from falsely claiming that Dura Lube 
contains no chlorinated compound or that it has been tested by the 
Environmental Protection Agency. It also prohibits them from claiming 
that Dura Lube meets the requirements or standards of any governmental 
or standard setting organization unless they possess competent and 
reliable evidence, which when appropriate must be competent and 
reliable scientific evidence, substantiating the claim.
    Part II of the proposed consent order prohibits Respondents from 
making unsubstantiated representations regarding the performance, 
benefits, efficacy, attributes or use of any product for use in an 
automobile, or from misrepresenting the results of any study. It 
specifically prohibits unsubstantiated claims that, compared to motor 
oil alone or oil treated with any other product, the product reduces 
engine wear or reduces it by any percentage, dollar or other figure; 
prolongs engine life; reduces emissions; reduces the risk of serious 
engine damage when oil pressure is lost; or improves gas mileage or 
improves it by any percentage, miles per gallon, dollar or other 
figure. It also prohibits unsubstantiated claims that one treatment 
reduces engine wear for 50,000 or any other number of miles. The 
evidence required to substantiate such claims includes competent and 
reliable evidence, which when appropriate must be competent and 
reliable scientific evidence.
    Part III of the proposed consent order prohibits Respondents from 
using misleading demonstrations in the sale of any product.
    Part IV of the proposed consent order prohibits Respondents from 
representing that any endorser of any product for use in a motor 
vehicle is an expert unless the endorser possesses the expertise he or 
she is represented to have and the endorsement is adequately supported 
by evidence that would be accepted by experts in the area.
    Part X of the proposed consent order requires Respondents to pay $2 
million in consumer redress. The Federal Trade Commission would 
administer and distribute the redress as the Commission, in its sole 
discretion, deemed appropriate. Respondents would be required to 
provide the Commission with the identities of consumers known to have 
purchased Dura Lube between January 1, 1994, and December 31, 1999. 
Consumers electing to accept the redress would release any claims 
against Respondents.
    The remainder of the proposed consent order also contains 
provisions regarding distribution of the order, replacement of product 
packaging and labeling with compliant packaging and labeling, record-
keeping, notification of changes in corporate status, termination of 
the order, and the filing of a compliance report.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and the proposed order or to modify 
their terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-8244 Filed 4-3-00; 8:45 am]
BILLING CODE 6750-01-M