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June 10, 2009

FTC Cites Kmart, Tender, Dyna-E for False Green Claims

The U.S. Federal Trade Commission (FTC) has charged Kmart Corp., Tender Corp., and Dyna-E International with making false and unsubstantiated claims that their paper products were “biodegradable.”

FTC charged the companies with making the following deceptive biodegradable claims:

• Kmart Corp. called its American Fare brand disposable plates biodegradable.
• Tender Corp. called its Fresh Bath-brand moist wipes biodegradable.
• Dyna-E International called its Lightload brand compressed dry towels biodegradable.

Kmart and Tender have agreed to settle the cases against them while the case against Dyna-E will be litigated. The FTC says with the recent growth in “green” advertising and product lines, the agency will continue its efforts to ensure that environmental marketing is truthful, substantiated, and not confusing to consumers.

In its settlement, Kmart has agreed to stop making deceptive “degradable” product claims for its American Fare private-label paper plates, reports MediaPost.

A spokesperson for Sears Holding Corp., which owns Kmart, told MediaPost that the company relied on the vendor’s documents to substantiate the claim “and these plates are biodegradable in a backyard compost.”

Last year, the FTC held three workshops to examine issues concerning the marketing of carbon offsets and renewable energy, green packaging, and green buildings and textiles. It’s expected to update its “Green Guides” this year, which have been in place since 1992 to regulate green advertising claims.

James Kohm, associate director of the Bureau of Consumer Protection’s enforcement division at the Federal Trade Commission, said at a recent hearing, “It’s Too Easy Being Green,” held by the House subcommittee on commerce, trade and consumer protection, that the FTC tried to collect information from consumers about their perception and understanding of green claims during workshops held back in November 2007, but didn’t receive many comments, reports Reuters.

Kohm added: “Without this data, the commission would face the difficult choice of either providing guidance that might inadvertently chill otherwise useful green claims or forgoing valuable guidance altogether.”

Now the FTC plans to conduct its own study of consumer understanding of green marketing claims and expects to complete analysis of the data later this year, according to Reuters.

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