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Insulation Marketing: Regulations That Guide Conduct
As the fall re-insulation season approaches, many companies will begin to focus more effort on marketing directly to homeowners. As this occurs, it is important to ensure that all marketing conforms to the various federal guidelines and regulations, which impact not only insulation but many consumer products.
Federal Trade Commission (FTC) R-value Rule: The FTC has specific regulations relating to insulation, referred to as the R-value Rule (16 C.F.R. Part 460). The basic purpose of the regulation is to ensure R-values are portrayed accurately to consumers. Insulation marketers must pay careful attention to the various requirements of this Rule, as failure to do so can have significant repercussions. In 2013, a federal court ordered a home insulation marketer to pay a $350,000 civil penalty for making deceptive and unsubstantiated claims about his products’ insulation capabilities. On the FTC’s behalf, the U.S. Department of Justice won the order on the merits of the case without a trial. The $350,000 figure is the largest civil penalty awarded in a home insulation case. The R-value Rule will come up for review with the FTC issuing a request for public comments in 2016 (80 Fed. Reg. 5712, February 3, 2015).
FTC Green Guides: Unlike the R-value Rule, these Guides apply to all products, but certainly are very relevant for insulation. The Guides were first issued in 1992 and updated most recently in 2012. They include general principles that apply to all environmental marketing claims; how consumers are likely to interpret particular claims; how marketers can substantiate these claims; and how marketers can qualify their claims to avoid deceiving consumers. It is important to recognize that the Guides, while not technically part of the Code of Federal Regulations (CFR), can nonetheless be enforced by FTC. Since the last update, the FTC has significantly increased its enforcement activity. In 2014 the building products industry witnessed this when the FTC issued a final order on a plastic lumber manufacturer that imposed a number of requirements, ranging from modification of marketing material to significant record keeping.
Cellulose fire hazard labeling: The Consumer Products Safety Commission (CPSC) requires that manufacturers of cellulose insulation affix caution labels to their packaging stating that it is a potential fire hazard. The purpose of the label is to warn both installers and consumers of the fire hazard associated with improperly installed cellulose insulation. This hazard is very real, as evidenced by a fire in 2014 which, according to Allstate Insurance, was caused by faulty installation of cellulose.
These guides and regulations serve both to protect consumers and provide a level playing field in the insulation industry and beyond. Ensuring that these guidelines are followed requires consistent vigilance on the part of those involved in marketing insulation.
Want to understand R-value better? Check out our explanation.