Following Second Compliance Review, NAD Refers Advertising From Goodman Global To FTC

New York, NY – Dec. 5,  2008 – The National Advertising Division of the Council of Better Business Bureaus has referred advertising from Goodman Global to the Federal Trade Commission for further review.

NAD, the advertising industry’s self-regulatory forum, recommended in November 2007 in that the company modify advertising for its heating and cooling products, following a challenge by Trane Residential Systems, a competing manufacturer of heating and cooling systems.

NAD examined advertising claims that included:

• “Effective Immediately – Regardless of SEER or AFUE rating, the original, registered, single-family homeowner will receive a 10-Year All-Parts Limited Warranty on all applicable products.”

In the underlying challenge, NAD determined that material limitations on the 10-year warranty were not clearly and adequately disclosed.

NAD opened its first compliance review in July 2008, when the challenger contacted NAD to raise concerns about print advertising in which the advertiser referenced its 10-Year All-Parts Limited Warranty without disclosing how and when a consumer must register the product online within 60 days to be eligible for the 10-year warranty.

The advertiser represented that it has permanently discontinued the claims and would continue to take steps to ensure that non-compliant advertisements were updated to include the disclosure language.

NAD opened a second compliance review in November 2008, after the challenger informed NAD that noncompliant brochures continued to circulate and asked NAD to open another compliance proceeding.

The advertiser informed NAD that it has undertaken a good faith effort to comply with NAD’s decision and that the brochure in question developed by a third-party in error. Upon learning of the mistake, the company said it immediately ordered the destruction of all copies and instructed its printer to send clients the corrected versions of the brochure. 

NAD, in its decision, noted that “the fact that non-compliant brochures continue to be printed and circulated demonstrates that the advertiser’s efforts to ensure compliance with NAD’s decision have been wholly insufficient.”

Consequently, in the absence of a bona fide effort to comply with NAD’s decision, NAD has referred the matter to the appropriate government agency for possible law enforcement action.