FTC is out of hibernation


February 24, 1991|By JANE BRYANT QUINN | JANE BRYANT QUINN,1991, Washington Post Writers Group

NEW YORK — New York

Memo to consumers bilked by deceptive advertising: It's time to put the Federal Trade Commission back in your Rolodex. If you complain, the commission might actually listen.

The FTC's job is to pursue deception and fraud. During the Reagan years, however, the commission all but went out of business. One reason you see so many unsubstantiated health and environmental claims on products is that few national efforts have been made to tell advertisers no.

Happily, the climate has changed. Under Chairman Janet D. Steiger, the FTC is bringing some high-profile cases to warn businesses that the cop is finally back on the beat. Last year, it filed 30 consumer-protection lawsuits, more than double the number filed in 1987.

Actions against deceptive ads also are up.

The FTC doesn't handle individual complaints. For that, you have to pester the executives of the company in question, or write to a state or local consumer agency or your state attorney general.

But one way the commission learns about fraud is through the letters consumers write. In the Reagan era, such letters were generally a waste of your time, and even now the FTC cannot follow up on every case. Still, all letters are read, acknowledged and logged into a computer that looks for patterns that

might spark an investigation. So send your complaint to Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580.

Recently, the FTC has:

* Charged the manufacturers and marketers of a purported cure for acquired immune deficiency syndrome, Immune Plus, with false and deceptive advertising.

* Found Kraft Inc. guilty of misrepresenting the amount of calcium in its individual cheese slices. Kraft was hit with an order not to misrepresent the nutrients in any cheese products.

* Held the New York ad agency Towne, Silverstein, Rotter liable, along with its client, Lewis Galoob Toys, for making false and deceptive claims about how the toys performed. That was the first case against an ad agency since 1985. Similarly, the FTC recently held a mail-order company, Haverhill, responsible for false claims about the goods in its catalogs.

* Filed its first three cases against companies with dubious "900" and "976" telephone numbers. Those companies get you to call their numbers without disclosing how much you have to pay per minute.

* Settled its first case in eight years against a company that stopped its dealers from cutting prices. The company, Kreepy Krauly U.S.A., makes devices that clean swimming pools. During the Reagan era, the FTC saw nothing wrong with agreements that kept retail prices up. Its change of heart should lead to lower prices for some products.

Ironically, many businesses are applauding the FTC's return to life. When the commission entered hibernation, the more activist states stepped into the breach -- passing consumer-protection laws and enforcing the fairness standards that the FTC had left to rot. Suddenly, companies were facing a welter of laws and rules that varied by state, and they didn't like it. As one executive told me, "I'd rather be regulated by one big gorilla than by 50 monkeys."

You mighty see this change first in the area of environmental claims. A number of states have started to define exactly what a "recycled" or "biodegradable" product is, and they

don't all agree. The FTC might establish more general guidelines that, businesses hope, would head off further state regulation. The FTC has 20 such cases under investigation, says Barry Cutler, director of the commission's Bureau of Consumer Protection.

Cutler objects to specific definitions. "If you say that recycled paper has to contain at least 25 percent of post-consumer waste, you're setting a product standard" that rewards some businesses but not others, he says.

His preferred approach is to consider what a word such as "biodegradable" means to consumers and to keep advertisers from using the word deceptively.

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