Dura Lube Corporation

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF DURA LUBE CORPORATION, ET AL.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket D-9292; File No. 962 3146 Complaint, April 29, 1999--Decision, May 3, 2000 This consent order addresses Dura Lube Corporation’s dissemination of advertisements making unsubstantiated claims regarding Super Dura Lube Engine Treatment and Advanced Dura Lube Engine Treatment (“Dura Lube”). 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%. Respondents also represented that product demonstrations in their advertising proved, demonstrated, or confirmed that, (a) 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 APete@ Conrad had endorsed the product based on a valid exercise of his expertise in the evaluation of automobile engine lubricants, when in fact Mr. Conrad did not have expertise in the evaluation and testing of automobile engine lubrication. The consent order requires Dura Lube Corporation, et al., to pay $2 million in consumer redress and 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.

Participants For the Commission: Joel Brewer, Jonathan Cowen, Lemuel Dowdy, and Robert M. Frisby.

VOLUME 129 Complaint For the Respondents: Lewis Rose, Arent Fox Kintner Plotkin & Kahn.

COMPLAINT The Federal Trade Commission, having reason to believe that Dura Lube Corporation, American Direct Marketing, Inc, Howe Laboratories, Inc, Crescent Manufacturing, Inc, The Media Group, Inc, and National Communications Corporation, corporations; Herman S. Howard, individually and as an officer and director of the corporations; and Scott Howard, individually and as an officer and director of the corporations hereinafter sometimes referred to as "respondents"), have violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Dura Lube Corporation (“DLC”) is a New York corporation with its principal office or place of business at 102-3 Hamilton Avenue, Stamford, Connecticut 06902. DLC coordinates the activities of the other corporate respondents herein, which include the manufacture, promotion and sale of Super Dura Lube Engine Treatment and Advanced Dura Lube Engine Treatment (“Dura Lube”), both purported automobile engine treatment products.

2. Respondent American Direct Marketing, Inc. (“ADM”) is a Delaware corporation with its office and principal place of business located at 300 McCann Street, Nashville, Tennessee 37210. ADM is responsible for the direct marketing of Dura Lube.

3. Respondent Howe Laboratories, Inc. (“Howe”) is a Delaware Corporation with its office and principal place of business located at 102-3 Hamilton Avenue, Stamford, Connecticut 06902. Howe is responsible for the distribution of Dura Lube to retailers.

DURA LUBE CORPORATION, ET AL. 995 Complaint 4. Respondent Crescent Manufacturing, Inc. (“Crescent”) is a New York corporation with its office and principal place of business located at 8800 South Main Street, Eden, New York 14057. Crescent manufactures and packages Dura Lube. 5. Respondent The Media Group, Inc. (“Media Group”) is a New York corporation with its office and principal place of business located at 102-3 Hamilton Avenue, Stamford, Connecticut 06902. Media Group provides advertising services for Dura Lube.

6. National Communications Corporation ("National") is a Delaware corporation with its office and principal place of business located at 102-3 Hamilton Avenue, Stamford, Connecticut 06903. National provides advertising services for Dura Lube.

7. Respondent Herman S. Howard is or was at relevant times herein an officer of the corporate respondents. Individually or in concert with others, he has formulated, directed, or controlled the acts and practices of the corporate respondents, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of DLC. 8. Respondent Scott Howard is or was at relevant times herein an officer of the corporate respondents. Individually or in concert with others, he has formulated, directed, or controlled the acts and practices of the corporate respondents, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of DLC. 9. The aforementioned respondents cooperated and acted together in carrying out the acts and practices hereinafter set forth. VOLUME 129 Complaint 10. Respondents have manufactured, advertised, promoted, labeled, offered for sale, sold, and distributed to the public various aftermarket motor oil additives (sometimes referred to as engine treatments) known by the product name Super Dura Lube Engine Treatment and Dura Lube Advanced Engine Treatment. These products consist of chlorinated paraffin and other chemicals suspended in motor oil.

11. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act. 12. Respondents have disseminated or have caused to be disseminated advertisements and labeling for Dura Lube, including but not necessarily limited to the attached Exhibits A through E. These advertisements contain the following statements, demonstrations, and other depictions:

A. A program-length television advertisement for Dura Lube-branded products (Exhibit A):

(1) Host: ...thousands of testimonials in writing...from people all across the country stat[e] how great Dura Lube really is. For instance, Minnesota. Newspaperman Gerald Snyder boosts his mileage and avoids a hundred dollar transmission repair by treating his car with Dura Lube. Los Angeles. Johnny Ishibashi’s ’68 Pontiac had flunked California’s tough emissions test. But after just one bottle of Dura Lube, it passed with flying colors.... (Exhibit A, p. 2) (2) Video: Mechanics manipulating remote controls of running automobile engine.

Host: We added Dura Lube to the oil of a huge race car engine and then drained all the oil out including the Dura Lube. Dura Lube works even if all your oil is gone.... Should the engine have DURA LUBE CORPORATION, ET AL. 997 Complaint seized already? Under normal circumstances. Severe engine damage would have happened by now.... Then, with no oil pressure we started revving that 500 horsepower engine up under full load. Got any load yet? Mechanic: Oh, we’ve got a lot of load, Jim. Up to 120 horsepower, 160, 224, 254, 260, 292... Excited Mechanic: I was ready to leave the building. I thought we were going to see the Fourth of July today and parts flying through that wall. Mechanic: 302, 348...

Superscript: NO OIL PRESSURE! Excited Mechanic: I was ready to run.

Mechanic: ...409, 453, 473 Second Excited Mechanic: I’m still speechless. Mechanic: ...482, 520, 525.

Third Excited Mechanic: Oh, no. Unbelievable. I don’t believe it. Oh, my God.

Superscript: A 500 HP Dura-Lube treated race car engine just ran successfully with no oil pressure under full load and high RPM...Unrehearsed! Host: That test left professional mechanics shaking. But even with no oil at all, even with that big torture run up, the bearings in the Dura Lubetreated engine looked as good as new, as you can see for yourself. (Exhibit A, pp. 3-4) (3) Video: Spectators around automobile engine mounted in open field; fire engine in background. Host: You know, Dura Lube really is a miracle, and we’re going to prove it again. We’re going to empty all the oil out. Now, you would expect that, right? Guess what we’re going to do next? We’re going to take all the water out. No oil. No coolant in the engine.... When we told the authorities what VOLUME 129 Complaint kind of test we were planning, they insisted that we have a fire truck standing by. They didn’t think any engine could withstand the kind of torture we had in mind. First, we started up a big six-cylinder engine. Then we drained out all the oil and that engine just kept humming along. No problem. But we wanted to top ourselves.... We drained that radiator dry as a bone and the engine just purred right along. All right. The oil’s gone. Water’s gone or just about gone. Why is this still running? Superscript: Floyd Stivik–Lubrication Specialist Floyd Stivik: Dura Lube. The quality of Dura Lube’s what’s happening, Jim. Dura Lube actually stays up there and does the lubrication for you. It doesn’t leave your engine.

Host: So it’s not treating the oil, it’s treating the metal.

Stivik: That’s exactly right. It’s treating the metal....

Host (to Spectator): Do you know anything about engines? Spectator: No, just put oil in when the little oil light goes on.

Host: Well, you always worry that one day you’re going to come home from work and the wife tells you that she meant to tell you for the last three days the red light is on in the car. And the next thing you know, you’ve got major problems, major cost factors. With this you wouldn’t have that problem. (Exhibit A, pp. 5-8) (4) Video: Scenes of outer space; graphic illustrations of moving parts in automobile engine.

Announcer: Introducing Dura Lube. The world’s first space age all-purpose lubricant that virtually eliminates friction like nothing on earth. In space there is no friction, but inside your engine friction drags on every moving component generating heat, DURA LUBE CORPORATION, ET AL. 999 Complaint wear and tear, causing poor fuel economy, more pollution, even engine breakdown.

Superscript: FRICTION CAUSES: Heat! Wear! Poor Fuel Economy! More Pollution! Engine Breakdown! Announcer: Dura Lube radically reduces friction by penetrating metal surfaces to create a nonfriction shield that gives you a more efficient engine. With Dura Lube you’ll have a cooler running engine and get more miles per gallon, more horsepower with less pollution and a quieter ride.

Superscript: DURALUBE Cooler Engine! More MPG! More Horsepower! Less Pollution! Quieter Ride! Much Less Wear! Announcer: You’ll eliminate the damage caused by cold starts saving you hundreds if not thousands of dollars.

Superscript: DURALUBE You’ll save hundreds of dollars, if not thousands! Announcer: Nothing compares to Dura Lube because it treats the metal, not the oil. Superscript: Treats the metal, not the oil. Announcer: In fact, the higher the temperature and pressure the better it performs. Dura Lube eats the heat and saves the engine.

Superscript: Eats the heat! Saves the engine. Protects up to 50,000 miles! Announcer: Just one bottle added to your engine’s oil protects for up to 50,000 miles. (Exhibit A, pp. 15-16) (5) Host: ...Now, that was a torture test, not something we recommend. But NASCAR driver Steve Hansen experienced exactly that. He didn’t mean to. VOLUME 129 Complaint Steve Hansen didn’t intend to completely lose his oil pump in the middle of a big race, but it happened. Superscript: It happened on August 7, 1993! Video: Cars circling racetrack.

Hansen: During the feature race, I started right up front, second car on the outside, green light went on, floored the car wide open. My oil pressure dropped down to nothing. I had no oil pressure. Superscript: Elko Minnesota September 11, 1993. Hansen: At that time I thought to myself, well, I’m done. I’ll pull off the track. But the motor still was running good. So I went for it. I figured if it’s going to blow up, it’s going to blow up. I continued to race strong. The oil light got brighter and brighter.... It wasn’t knocking. It wasn’t ticking. It was running strong. I finished a 15-lap race which isn’t bad considering I had no oil and the motor was still running.... (Exhibit A, pp. 19- 20) (6) Host: That’s what Dura Lube can do in emergencies. Let’s see what it’s doing for folks day after day.

First Consumer Endorser: The car was overheating a lot and running hot and I put it right in the motor with the oil and not a problem since. Superscript: Cools the engine! Second Consumer Endorser: I used to have this exhaust problem, there would be this little cloud of smoke that was behind my car all the time. After I used Dura Lube it disappeared completely. Superscript: Cleaner emissions! Third Consumer Endorser: I used it in my own personal vehicle and I’ve noticed almost 40 to 45 percent increase in my fuel.

Superscript: More MPG! Host: Oh, come on.

DURA LUBE CORPORATION, ET AL. 1001 Complaint Third Endorser: Really. Really. I usually fuel up once a week and now I’m doing it every two weeks. And I only go like five miles a day round trip.

Host: So you’ve got a routine.

Third Endorser: I’ve got a routine. Believe me, I’ve got a routine. Let me tell you. I can honestly say without a word of a lie that I’ve almost doubled the amount of time I can go on a tank of gas in my truck. (Exhibit A, pp. 20-21). (7) Host: How can one product do so much? Breakthrough technology. And no one knows that better than astronaut Pete Conrad. You probably know him from his famous walk on the moon. But to Pete that’s old news. Just recently he flight managed our nation’s latest breakthrough, the Delta Clipper, the rocket ship blasts off and then it stops in mid-air. Now, this is like something out of Buck Rogers. Then it moves sideways. And then it lands, ready to take off again.

Superscript: Pete Conrad Conrad: With Delta Clipper you have an old idea using today’s technology that will allow low cost access to space. With Dura Lube, what can I say? I knew it was a real advance in engine lubrication. Now everyone knows it. Sure there were skeptics. Just like there were plenty of skeptics regarding the Delta Clipper idea, but now we know they’re both winners. (Exhibit A, p. 22) (8) Host: Just how is Dura Lube able to do all those things? Well, recently we got together with our lubrication specialist, Floyd Stivik. He showed me a simple demonstration of the secret to Dura Lube’s success....

VOLUME 129 Complaint Stivik: Dura Lube will actually go in and relieve that heat and pressure. That’s saving oil, saving maintenance on the car, saving those engines, Jim. Host: Especially the small cars.

Stivik: Especially small cars, Jim. Let me show you what we’re going to do here. We have a piece of sheet metal. We’re going to simulate an engine. Host: I see this is flat.... What are you going to do? Superscript: Perfectly level.

Stivik: We’re going to...put in oil. Hand me some oil, Jim.

Host: Now, do you care which one? Stivik: It doesn’t make any difference. Dura Lube is completely compatible with all oil, Jim. Synthetics, naturals, it doesn’t make any difference....

Video: Untreated oil heated on piece of sheet metal.

Stivik: ...We’re going to see that actually it’s going to start cooking down and it will actually move away from the flames.

Host: You can certainly see that it is spreading out. Stivik: Spreading out and you can see it’s starting to cook a little along this edge and moving away from the heat over here.... Now I’m going to pour some Dura Lube in here and we’re going to see what happened.... Look at how it’s going to travel. It’s traveling towards that heat. Jim, it goes to the heat. That’s what’s really important. Dura Lube eats the heat and saves those engines. Look at that. Look at that moving to the heat. Isn’t it amazing? Look what it’s doing. It’s going to come in and marry up to that old oil and do the lubrication job that’s necessary on that engine. (Exhibit A, pp. 23- 25) (9) Announcer: Just look at this heat and pressure test conducted by the Falex Corporation. Now, this DURA LUBE CORPORATION, ET AL. 1003 Complaint independent laboratory found premium oil failing at 1,250 pounds. STP hit the failure mark and 1,750 pounds. Slick 50 fared a little bit better, but it too failed at 2,250 pounds. Now look at Dura Lube. It ran in the optimal temperature zone the whole day. Dura Lube ran off the chart.

Superscript: NO FAILURE Superscript: Pete Conrad Conrad: I insisted that they run that test. They did it and it passed with flying colors. (Exhibit A, pp. 25-26) (10) Host: You’re cruising to the grocery store or something and your oil light comes on. Middle of the night, what are you going to do? Are you going to sit there and walk? If you have Dura Lube in your car, you’re going to make it to your destination. (Exhibit A, p. 27) B. Dura Lube Advanced Engine Treatment Container Box Labeling (Exhibit B) (1) Tested #1. Dura Lube Advanced Engine Treatment for gas and diesel engines saves fuel, improves performance, protects engine at start up, prolongs engine life. (Exhibit B, front panel) VOLUME 129 Complaint (2) Pictured: Conrad in space suit with NASA logo. Text: Dura-Lube is the best lubricant I’ve ever seen. It’s absolutely amazing! -- Charles “Pete” Conrad, International Dura-Lube spokesman.  Captain United States Navy (retired)  Skylab 1: Commander; 1973  *Apollo XII: Commander; 1969  Gemini XI: Commander Pilot, 1966  Gemini V: Pilot, 1965 *Executed the second lunar landing (Exhibit B, side panel).

(3) Pictured: Chart of Falex Pin & V-Block test results. Text of caption explains chart as comparing results for “a leading motor oil,” “a leading synthetic oil,” Slick 50 and Dura Lube. All but the Dura Lube results show failure when load is increased.

Text: Dura-Lube dramatically reduces friction and wear, increases gas mileage and horsepower, makes starting easier, improves performance, and extends engine life.

Dura-Lube’s micro-thin layer of bonded protection, however, safeguards vital engine components during these critical (cold start) periods, allowing engine parts to glide effortlessly against each other, reducing wear by more than 50%! Dura-Lube contains none of the potentially harmful solid particles such as lead, silicone, molybdenum disulfide, PTFE, or graphite, which are found in other lubrication products. These ingredients can present a hazard to the environment DURA LUBE CORPORATION, ET AL. 1005 Complaint and some can change tolerance in your vehicle’s engine.

Dura-Lube’s amazing formulation is the choice of professionals worldwide. It is used by taxi companies, police departments, and utilities to reduce fuel and maintenance costs, and to prolong engine life. Professional drivers choose Dura-Lube to protect their engines through the extreme conditions of auto racing, and because Dura-Lube increases horsepower, torque, compression, and fuel economy.

Dura-Lube contains NO chlorinated solvents, NO chlorinated esters, and NO ingredients listed as halogenated hazardous wastes by the U.S. E.P.A. (Exhibit B, back panel) (4) Headline: Some Facts You Should Know Text: Added to the engine of any car or truck, Dura-Lube dramatically reduces friction and wear, increases gas mileage and horsepower, makes starting easier, improves performance, and extends engine life.

[Dura-Lube] dramatically reduces friction and wear and allows your vehicle’s engine to run smoother and cleaner.

Q: Can I use Dura-Lube if I’ve already treated my engine oil with another product? A. Yes. You should notice an immediate improvement.

Q: Who tested Dura-Lube? VOLUME 129 Complaint A. Tests on Dura-Lube have been performed by the Falex Corporation, the world’s largest manufacturer of friction and wear test equipment; by approved test facilities in the United States by numerous testing facilities in Europe, and by satisfied drivers all over the world who have traveled millions of trouble free miles using Dura- Lube.

Q: How long does Dura-Lube last? A. Dura-Lube protects your vehicle’s engine for up to 50,000 miles of normal driving.

C. Dura Lube Advanced Engine Treatment Bottle Labeling (Exhibit C) Dura-Lube Engine Treatment dramatically reduces friction and wear, increases gas mileage and horse power, makes starting easier, improves performance, and extends engine life. Dura Lube Engine Treatment protects engine up to 50,000 miles of normal driving. D. Dura Lube Print Advertising (Exhibit D): (1) Headline: Save up to $25 per month on gas...or it’s free! (2) Pictured: Chart titled “Metal against metal pressure test.” Caption explains chart as comparing results of extreme pressure tests for "Penzoil" [sic], "Quaker State," "Slick 50," "Marvel" and "STP." All but the Dura Lube results show failure when pressure up to 40 pounds is applied.

(3) Text: Duralube will save you up to 35% on gasoline! -- and add thousands of miles to the life of your car’s engine -- in just one treatment! DURA LUBE CORPORATION, ET AL. 1007 Complaint (4) Our new product actually saves you money on gas by improving the efficiency of your engine and increasing your gas mileage by 15, 25, even 35%. (5) The experts agree. We knew we’d have doubters, but we have proof on our side. In tests performed by the U.S. Government’s Environmental Protection Agency DuraLube clearly increased gas mileage and cut down on harmful emissions. But we knew some people still wouldn’t be convinced, so we contracted with another independent testing laboratory, and then another, and all agreed that DuraLube works.

E. Dura Lube Direct Response Advertising (Exhibit E) (1) Inset: Picture of Conrad Picture caption with quote: Charles “Pete” Conrad, Jr., International Dura Lube Spokesperson, Research and Development Specialist. “It’s absolutely amazing! DURA LUBE passed the tests with flying colors.”

(2) Text: Dura Lube dramatically reduces friction and wear by penetrating metal surfaces to create a non friction shield and give you a better running engine. You’ll get a smoother ride while eliminating the damage caused by cold engine starts.... In independent lab tests, 3 of the most popular lubricants failed, but DURA LUBE ran off the chart. The engineers couldn’t get it to fail! VOLUME 129 Complaint (3) We’ve even test-raced DURA LUBE in a 500 horsepower engine without any oil and found that DURA LUBE’s state of the art protection kept on working because DURA LUBE treats the metal, not the oil. DURA LUBE eats the heat and saves the engine. Just one bottle added to your engine’s oil protects for up to 50,000 miles so your motor will run smoother and last longer. This means less maintenance, less breakdowns, and less repairs! DURA LUBE’s secret formula contains no solids of any kind.

(4) Pictured: Graph comparing result of Falex Pin & V-Block test showing Dura Lube passing and other lubricants failing.

13. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that: A. Dura Lube does not contain any chlorinated compound.

B. Dura Lube has been tested by the U.S. Environmental Protection Agency.

14. In truth and in fact:

A. Dura Lube contains chlorinated paraffin, a chlorinated compound.

B. Dura Lube has not been tested by the U.S. Environmental Protection Agency.

Therefore, the representations set forth in Paragraph 13 were, and are, false or misleading.

15. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that: DURA LUBE CORPORATION, ET AL. 1009 Complaint A. Compared to motor oil alone or motor oil treated with any other product, using 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.

7. Improves gas mileage by up to 35%. B. One treatment of Dura Lube continues to protect the engine for up to 50,000 miles.

16. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that at the time they made the representations set forth in Paragraphs 13 and 15, respondents possessed and relied upon a reasonable basis that substantiated such representations. 17. In truth and in fact, at the time they made the representations set forth in Paragraphs 13 and 15, respondents did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in Paragraph 16 was, and is, false or misleading. VOLUME 129 Complaint 18. Through the means described in Paragraph 12, respondents have represented, expressly or by implication, that tests prove that:

A. Compared to motor oil alone, using Dura Lube: 1. Improves gas mileage.

2. Improves gas mileage by up to 35%. 3. Reduces emissions.

4. Prolongs engine life.

5. Reduces engine wear.

6. Reduces the risk of serious engine damage when oil pressure is lost.

B. One treatment of Dura Lube continues to protect the engine for up to 50,000 miles.

19. In truth and in fact, tests do not prove that: A. Compared to motor oil alone, using Dura Lube: 1. Improves gas mileage.

2. Improves gas mileage by up to 35%. 3. Reduces emissions.

4. Prolongs engine life.

5. Reduces engine wear.

6. Reduces the risk of serious engine damage when oil pressure is lost.

DURA LUBE CORPORATION, ET AL. 1011 Complaint B. One treatment of Dura Lube continues to protect the engine for up to 50,000 miles.

Therefore, the representations set forth in Paragraph 18 were, and are, false or misleading.

20. Through the means described in Paragraph 12, including, but not necessarily limited to, the demonstrations in Exhibit A, respondents have represented, expressly or by implication, that: A. The demonstration consisting of running an automobile engine after draining the motor oil treated with Dura Lube, proves, demonstrates or confirms that, compared to motor oil alone, Dura Lube reduces the risk of serious engine damage when oil pressure is lost.

B. The demonstration consisting of heating untreated oil on sheet metal and then treating it with Dura Lube proves, demonstrates or confirms that, without Dura Lube, motor oil fails to protect automobile engines under hot running conditions.

21. In truth and in fact:

A. The demonstration referred to in Paragraph 20.A does not prove, demonstrate or confirm that, compared to motor oil alone, Dura Lube reduces the risk of serious engine damage when oil pressure is lost. B. The demonstration referred to in Paragraph 20.B does not prove, demonstrate or confirm that, without Dura Lube, motor oil fails to protect automobile engines under hot running conditions.

VOLUME 129 Complaint Therefore, the representations set forth in Paragraph 20 were, and are, false or misleading.

22. Through the means described in Paragraph 12, including, but not necessarily limited to, the advertisements, labeling and promotional materials attached as Exhibits A-B and E, respondents have represented, expressly or by implication, that Charles "Pete" Conrad ("Conrad"), a former Naval aviator and NASA astronaut, has expertise in the evaluation and testing of automobile engine lubrication, and has conferred his endorsement of Dura Lube on the basis of an independent, objective and valid evaluation or test using procedures generally accepted in the field of automobile engine lubrication to yield accurate and reliable results.

23. In truth and in fact, Conrad does not have expertise in the evaluation and testing of automobile engine lubrication, and has not conferred his endorsement of Dura Lube on the basis of an independent, objective, and valid evaluation or test using procedures generally accepted in the field of automobile engine lubrication to yield accurate and reliable results. Therefore, the representations as set forth in Paragraph 22 were, and are, false and misleading.

24. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

NOTICE Notice is hereby given to each of the respondents hereinbefore named that the third day of June, 1999, at 10:00 a.m. o’clock, or such later date as determined by an Administrative Law Judge of the Federal Trade Commission, is hereby fixed as the time, and Room 532, Federal Trade Commission Building, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 as the DURA LUBE CORPORATION, ET AL. 1013 Complaint place when and where a hearing will be had before an Administrative Law Judge of the Federal Trade Commission, on the charges set forth in this complaint, at which time and place you will have the right under the Federal Trade Commission Act to appear and show cause why an order should not be entered requiring you to cease and desist from the violations of law charged in this complaint.

You are notified that the opportunity is afforded you to file with the Commission an answer to this complaint on or before the twentieth (20th) day after service of it upon you. An answer in which the allegations of the complaint are contested shall contain a concise statement of the facts constituting each ground of defense; and specific admission, denial, or explanation of each fact alleged in the complaint or, if you are without knowledge thereof, a statement to that effect. Allegations of the complaint not thus answered shall be deemed to have been admitted. If you elect not to contest the allegations of fact set forth in the complaint, the answer shall consist of a statement that you admit all of the material allegations to be true. Such an answer shall constitute a waiver of hearings as to the facts alleged in the complaint, and together with the complaint will provide a record basis on which the Administrative Law Judge shall file an initial decision containing appropriate findings and conclusions and an appropriate order disposing of the proceeding. In such answer you may, however, reserve the right to submit proposed findings and conclusions and the right to appeal the initial decision to the Commission under Section 3.52 of the Commission’s Rules of Practice for Adjudicative Proceedings. Failure to answer within the time above provided shall be deemed to constitute a waiver of your right to appear and contest the allegations of the complaint and shall authorize the Administrative Law Judge, without further notice to you, to find VOLUME 129 Complaint the facts to be as alleged in the complaint and to enter an initial decision containing such findings, appropriate conclusions and order.

The following is the form of order which the Commission has reason to believe should issue if the facts are found to be as alleged in the complaint. If, however, the Commission should conclude from record facts developed in any adjudicative proceedings in this matter that the proposed order provisions as to Dura Lube Corporation, American Direct Marketing, Inc., Howe Laboratories, Inc., Crescent Manufacturing, Inc., and The Media Group, Inc., corporations; Herman S. Howard, individually and as an officer and director of the said corporations; and Scott Howard, individually and as an officer and director of the said corporations, might be inadequate to fully protect the consuming public, the Commission may order such other relief as it finds necessary or appropriate, including corrective advertising or other affirmative disclosure.

Moreover, the Commission has reason to believe that, if the facts are found as alleged in the complaint, it may be necessary and appropriate for the Commission to seek relief to redress injury to consumers, or other persons, partnerships or corporations, in the form of restitution and refunds for past, present, and future consumers and such other types of relief as are set forth in Section 19(b) of the Federal Trade Commission Act. The Commission will determine whether to apply to a court for such relief on the basis of the adjudicative proceedings in this matter and such other factors as are relevant to consider the necessity and appropriateness of such action.

ORDER Definitions For purposes of this Order, the following definitions shall apply:

DURA LUBE CORPORATION, ET AL. 1015 Complaint “Dura Lube” shall mean the aftermarket motor oil additive known as Super Dura Lube Engine Treatment, Advanced Dura Lube Engine treatment, or any product of substantially similar composition marketed as a motor oil product. “Motor oil product” shall mean a product for use in conjunction with or in place of fully formulated motor oil. “Competent and reliable scientific evidence” shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. Unless otherwise specified, “respondents” shall mean Dura Lube Corporation, American Direct Marketing, Inc., Howe Laboratories, Inc., Crescent Manufacturing, Inc., The Media Group, Inc., and National Communications Corporation, corporations, their successors and assigns, and their officers, agents, attorneys, representatives, and employees; and Herman S. Howard and Scott Howard, individually and as officers of the corporations, whether acting directly or through any corporation, subsidiary, division, trust or other device, or any of them. “Commerce” shall be as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

I.

IT IS ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of Dura Lube, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, that: VOLUME 129 Complaint A. Dura Lube contains no chlorinated compound or any harmful component.

B. Dura Lube has been tested by the U.S. Environmental Protection Agency or meets the specifications, requirements or standards of any governmental or standard setting organization.

II.

IT IS FURTHER ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of any product for use in any motor vehicle, in or affecting commerce, do forthwith cease and desist from:

A. Making any representation, in any manner, expressly or by implication, that:

1. Compared to motor oil alone or motor oil treated with any other product, using such product: a. Reduces engine wear;

b. Reduces engine wear by any percentage, dollar or other figure;

c. Prolongs engine life;

d. Reduces emissions;

e. Reduces the risk of serious engine damage when oil pressure is lost;

f. Improves gas mileage;

g. Improves gas mileage by any percentage, miles per gallon, dollar, or other figure;

DURA LUBE CORPORATION, ET AL. 1017 Complaint 2. One or any other number of treatments of such product reduces wear for 50,000 or any other number of miles; or, 3. Regarding the performance, benefits, efficacy, attributes or use of such product, unless, at the time of making such representation, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

B. Misrepresenting, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test or study. III.

IT IS FURTHER ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of any product, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, that any demonstration, picture, experiment, illustration or test proves, demonstrates or confirms any material quality, feature or merit of such product, or the superiority or comparability of the product in a material respect relative to any other product.

IV.

IT IS FURTHER ORDERED that, respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of any product, in or affecting commerce, shall cease and desist from representing, directly or by VOLUME 129 Complaint implication, that such product has been endorsed by a person, group or organization that is an expert with respect to the endorsement message, unless:

A. The endorser’s qualifications give the endorser the expertise that the endorser is represented as possessing with respect to the endorsement; and B. The endorsement is supported by an objective and valid evaluation or test using procedures generally accepted by experts in that science or profession to yield accurate and reliable results.

V.

IT IS FURTHER ORDERED that, for five (5) years after the last date of dissemination of any representation covered by this order, respondents shall maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All labeling, packaging, advertisements and promotional materials setting forth any representation covered by this order;

B. All materials that were relied upon to substantiate any representation covered by this order; and C. All tests, reports, studies, surveys, demonstrations or other evidence in their possession or control, or of which they have knowledge, that contradict, qualify, or call into question such representation, or the basis relied upon for the representation, including complaints and other communications with consumers, third-party dispute mediators, or governmental or consumer protection organizations.

DURA LUBE CORPORATION, ET AL. 1019 Complaint VI.

IT IS FURTHER ORDERED that:

A. The corporate respondents and their successors and assigns shall notify the Federal Trade Commission at least thirty (30) days prior to any change in the corporate respondents that may affect compliance obligations arising under this order, including but not limited to dissolution, assignment, sale, merger or other action that would result in the emergence of a successor corporation, the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order, the proposed filing of a bankruptcy petition, or a change in the corporate name or address. Provided, however, that with respect to any proposed change in the corporation about which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as practicable after obtaining such knowledge.

B. Each of the individual respondents, for a period of ten (10) years after the date of issuance of this order, shall notify the Federal Trade Commission of the discontinuance of his current business or employment, or his affiliation with any new business or employment. The notice shall include the respondent’s new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580. VOLUME 129 Complaint VII.

IT IS FURTHER ORDERED that the corporate respondents and their successors and assigns and the individual respondents shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of this order. Respondents shall deliver this order to current personnel within thirty (30) days after the service of this order, and to future personnel within thirty (30) days after the person assumes such position and responsibilities. VIII.

IT IS FURTHER ORDERED that respondents shall: A. Within thirty (30) days after the date of service of this order, send notice of this order by first class certified mail, return receipt requested, to each purchaser for resale of Dura Lube with which respondents have done business since January 1, 1994. The mailing shall not include any other documents;

B. In the event that respondents receive any information that subsequent to its receipt of notice of this order any purchaser for resale is using or disseminating any advertisement or promotional material that contains any representation prohibited by this order, respondents shall immediately notify the purchaser for resale that respondents will terminate the use of said purchaser for resale if it continues to use such advertisements or promotional materials; and C. Terminate the use of any purchaser for resale about which respondents receive any information that such purchaser for resale has continued to use any representation DURA LUBE CORPORATION, ET AL. 1021 Complaint prohibited by this order after receipt of the notice required by subparagraph B of this part.

IX.

IT IS FURTHER ORDERED that respondents shall, for five (5) years after the last correspondence to which they pertain, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. Copies of all signed statements obtained from persons or entities pursuant to part VII of this order; B. Copies of all notification letters sent to purchasers for resale pursuant to subparagraph A of part VIII of this order; and C. Copies of all communications with purchasers for resale pursuant to subparagraphs B and C of part VIII of this order.

X.

IT IS FURTHER ORDERED that respondents shall, within sixty (60) days after service of this order, file with the Federal Trade Commission a report, in writing, setting forth in detail the manner and form in which they have complied or intend to comply with this order.

XI.

IT IS FURTHER ORDERED that this order will terminate twenty (20) years from the date of its issuance, or twenty years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an VOLUME 129 Complaint accompanying consent decree) in federal court alleging any violation of the order, whichever later occurs; provided, however, that the filing of such complaint will not affect the duration of: A. Any paragraph in this order that terminates in less than twenty years;

B. This order’s application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this paragraph. Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint had never been filed, except that the order will not terminated between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. IN WITNESS WHEREOF, the Federal Trade Commission has caused this complaint to be signed by its Secretary and its official seal to be hereto affixed at Washington, D.C. this twentyninth day of April, 1999.

By the Commission.

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ADVANCED ~ ENGINE TREATMENT ‘ VOLUME 129 Decision and Order DECISION AND ORDER The Federal Trade Commission having issued its complaint charging the respondents named in the caption hereof with violation of Section 5(a) of the Federal Trade Commission Act, as amended, and the respondents having been served with a copy of that complaint, together with a notice of contemplated relief; and The respondents, their attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents of facts, other than jurisdictional facts, or of violations of law as alleged in the complaint issued by the Commission; and The Secretary of the Commission having thereafter withdrawn this matter from adjudication in accordance with ' 3.25(c) of its Rules; and The Commission having considered the matter and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in ' 3.25(f) of its Rules, the Commission hereby makes the following jurisdictional findings and enters the following order: 1.a. Respondent Dura Lube Corporation (ADLC@) is a New York corporation with its principal office or place of business at 102-3 Hamilton Avenue, Stamford, Connecticut 06902. 1.b. Respondent American Direct Marketing, Inc. (AADM@) is a Delaware corporation with its office and principal place of business located at 1000 Apex Street, Nashville, Tennessee 37210.

DURA LUBE CORPORATION, ET AL. 1055 Decision and Order 1.c. Respondent Howe Laboratories, Inc. (AHowe@) is a Delaware corporation with its office and principal place of business located at 102-3 Hamilton Avenue, Stamford, Connecticut 06902.

1.d. Respondent Crescent Manufacturing, Inc. (ACrescent@) is a New York corporation with its office and principal place of business located at 8800 South Main Street, Eden, New York 14057.

1.e. Respondent The Media Group, Inc. (AMedia Group@) is a New York corporation with its office and principal place of business located at 102-3 Hamilton Avenue, Stamford, Connecticut 06902.

1.f. National Communications Corporation ("National") is a Delaware corporation with its office and principal place of business located at 102-3 Hamilton Avenue, Stamford, Connecticut 06902.

1.g. Respondent Herman S. Howard is or was at relevant times herein an officer of the corporate respondents. Individually or in concert with others, he has formulated, directed, or controlled the acts and practices of the corporate respondents, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of DLC, Howe, Media Group, and National.

1.h. Respondent Scott Howard is or was at relevant times herein an officer of the corporate respondents. Individually or in concert with others, he has formulated, directed, or controlled the acts and practices of the corporate respondents, including the acts or practices alleged in this complaint. His principal office or place of business is the same as that of DLC, Howe, Media Group, and National.

VOLUME 129 Decision and Order 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER Definitions For purposes of this Order, the following definitions shall apply:

ADura Lube@ shall mean the aftermarket motor oil additive known as Super Dura Lube Engine Treatment, Advanced Dura Lube Engine treatment, or any product of substantially similar composition marketed as a motor oil product. AMotor oil product@ shall mean a product for use in conjunction with or in place of fully formulated motor oil. ACompetent and reliable scientific evidence@ shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results. Unless otherwise specified, Arespondents@ shall mean Dura Lube Corporation, American Direct Marketing, Inc., Howe Laboratories, Inc., Crescent Manufacturing, Inc., The Media Group, Inc., and National Communications Corporation, corporations, their successors and assigns, and their officers, agents, attorneys, representatives, and employees; and Herman S. Howard and Scott Howard, individually and as officers of the corporations, whether acting directly or through any corporation, subsidiary, division, trust or other device, or any of them. DURA LUBE CORPORATION, ET AL. 1057 Decision and Order ACommerce@ shall be as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. ' 44.

I.

IT IS ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of Dura Lube, in or affecting commerce, shall not represent, in any manner, expressly or by implication, that: A. Dura Lube contains no chlorinated compound unless such is the case;

B. Dura Lube has been tested by the U.S. Environmental Protection Agency unless such is the case; or 1. Dura Lube meets the specifications, requirements or standards of any governmental or standard setting organization, unless, at the time of making such representation, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. II.

IT IS FURTHER ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of any product for use in any motor vehicle, in or affecting commerce, do forthwith cease and desist from:

A. Making any representation, in any manner, expressly or by implication:

VOLUME 129 Decision and Order 1. That, compared to motor oil alone or motor oil treated with any other product, using such product: a. Reduces engine wear;

b. Reduces engine wear by any percentage, dollar or other figure;

c. Prolongs engine life;

d. Reduces emissions;

e. Reduces the risk of serious engine damage when oil pressure is lost;

f. Improves gas mileage;

g. Improves gas mileage by any percentage, miles per gallon, dollar, or other figure;

2. That one or any other number of treatments of such product reduces wear for 50,000 or any other number of miles; or, 3. Regarding the performance, benefits, efficacy, attributes or use of such product, unless, at the time of making such representation, respondents possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

B. Misrepresenting, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test or study. DURA LUBE CORPORATION, ET AL. 1059 Decision and Order III.

IT IS FURTHER ORDERED that respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of any product, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, that any demonstration, picture, experiment, illustration or test proves, demonstrates or confirms any material quality, feature or merit of such product, or the superiority or comparability of the product in a material respect relative to any other product.

IV.

IT IS FURTHER ORDERED that, respondents, in connection with the manufacturing, advertising, labeling, packaging, offering for sale, sale, or distribution of any product for use in any motor vehicle, in or affecting commerce, shall cease and desist from representing, directly or by implication, that such product has been endorsed by a person, group or organization that is an expert with respect to the endorsement message, unless: A. The endorser=s qualifications give the endorser the expertise that the endorser is represented as possessing with respect to the endorsement; and B. The endorsement is supported by an objective and valid evaluation or test using procedures generally accepted by experts in that science or profession to yield accurate and reliable results.

VOLUME 129 Decision and Order V.

IT IS FURTHER ORDERED that, for five (5) years after the last date of dissemination of any representation covered by this order, respondents shall maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. All labeling, packaging, advertisements and promotional materials setting forth any representation covered by this order; B. All materials that were relied upon to substantiate any representation covered by this order; and C. All tests, reports, studies, surveys, demonstrations or other evidence in their possession or control, or of which they have knowledge, that contradict, qualify, or call into question such representation, or the basis relied upon for the representation, including complaints and other communications with consumers, third-party dispute mediators, or governmental or consumer protection organizations.

VI.

IT IS FURTHER ORDERED that:

A. The corporate respondents and their successors and assigns shall notify the Federal Trade Commission at least thirty (30) days prior to any change in the corporate respondents that may affect compliance obligations arising under this order, including but not limited to dissolution, assignment, sale, merger or other action that would result in the emergence of a successor corporation, the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order, the proposed filing of a bankruptcy petition, or a change in the corporate name or address. Provided, however, that with respect to any proposed change in the corporation about DURA LUBE CORPORATION, ET AL. 1061 Decision and Order which respondents learn less than thirty (30) days prior to the date such action is to take place, respondents shall notify the Commission as soon as practicable after obtaining such knowledge.

B. Each of the individual respondents, for a period of ten (10) years after the date of issuance of this order, shall notify the Federal Trade Commission of the discontinuance of his current business or employment, or his affiliation with any new business or employment. The notice shall include the respondent=s new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities.

All notices required by this Part shall be sent by certified mail to the Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580. VII.

IT IS FURTHER ORDERED that the corporate respondents and their successors and assigns and the individual respondents shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of this order. Respondents shall deliver this order to current personnel within thirty (30) days after the service of this order, and to future personnel within thirty (30) days after the person assumes such position and responsibilities. VOLUME 129 Decision and Order VIII.

IT IS FURTHER ORDERED that respondents shall: A. Within fifteen (15) days after the date of service of this order, send by first class certified mail, return receipt requested, to each purchaser for resale of Dura Lube with which respondents have done business since January 1, 1994, notice of this order in the form attached as Attachment A. The mailing shall not include any other documents;

B. By May 15, 2000, send a representative to all facilities operated by each purchaser for resale to which respondents sent Attachment A to replace the Dura Lube labels and packaging with labels and packaging that comply with this order. C. In the event that respondents receive any information that subsequent to its receipt of notice of this order any purchaser for resale is using or disseminating any advertisement or promotional material specified in Attachment A, respondents shall: (1) immediately send such purchaser for resale a letter requesting that it stop using or disseminating any item specified in Attachment A and notifying it that the respondents will report its use or dissemination of any item specified in Attachment A to the Commission; and (2) within thirty (30) days notify the Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, in writing, of such purchaser for resale=s identity and its use or dissemination of any item specified in Attachment A. DURA LUBE CORPORATION, ET AL. 1063 Decision and Order IX.

IT IS FURTHER ORDERED that respondents shall, for five (5) years after the last correspondence to which they pertain, maintain and upon request make available to the Federal Trade Commission for inspection and copying: A. Copies of all signed statements obtained from persons or entities pursuant to part VII of this order; B. Copies of all notification letters sent to purchasers for resale pursuant to subparagraph A of part VIII of this order; and C. Copies of all communications with purchasers for resale pursuant to subparagraph C of part VIII of this order. X.

IT IS FURTHER ORDERED that:

A. Not later than five (5) days after the date this Order becomes final, respondents shall deposit by electronic funds transfer into an escrow account to be established by the Federal Trade Commission for the purpose of receiving the payment due under the provisions of this order, the sum of two million dollars ($2,000,000). In the event of any default on any obligation to make payment under this Part, interest, computed pursuant to 28 U.S.C. ' 1961(a) shall accrue from the date of default to the date of payment. In the event of default, respondents shall be jointly and severally liable for the two million dollar ($2,000,000) payment required by this paragraph and any interest on such payment.

VOLUME 129 Decision and Order B. The funds paid by respondents pursuant to subpart A above, together with accrued interest, less any amount necessary to pay the costs of administering the redress program herein, shall be used by the Federal Trade Commission or a Redress Administrator designated by the Federal Trade Commission to provide refunds to Dura Lube purchasers. Payment to such persons represents redress and is intended to be compensatory in nature, and no portion of such payment shall be deemed a payment of any fine, penalty, or punitive assessment. A consumer shall have the right to participate in the redress distribution only upon signing a waiver of rights and release of all claims against respondents. The Federal Trade Commission has sole discretion to determine how any redress funds are administered and distributed. Respondents shall be notified as to how the funds are disbursed, but shall have no right to contest the manner of distribution chosen by the Federal Trade Commission. The Federal Trade Commission, or its designated Redress Administrator, shall in its sole discretion select the escrow agent.

C. Respondents relinquish all dominion, control and title to the funds paid into the escrow account, and all legal and equitable title to the funds shall vest in the Treasurer of the United States unless and until such funds are disbursed to the designated purchasers of Dura Lube. Respondents shall make no claim to or demand for the return of the funds, directly or indirectly, through counsel or otherwise; and in the event of bankruptcy of any respondent, respondents acknowledge that the funds are not part of the debtor's estate, nor does the estate have any claim or interest therein.

1. Not later than the date this Order becomes final, respondents shall, to the extent available, provide to the Federal Trade Commission, in computer readable form (standard MS-DOS diskettes or IBM-mainframe DURA LUBE CORPORATION, ET AL. 1065 Decision and Order compatible tape) and in computer print-out form, a list of the name and address of all consumers in the United States who purchased Dura Lube from January 1, 1994, to December 31, 1999.

D. The Redress Administrator shall destroy all records relating to this matter six (6) years after the transfer of any remaining redress funds to the U.S. Treasury or the closing of the account from which such funds were disbursed, whichever is earlier, provided that no records shall be destroyed unless and until a representative of the Federal Trade Commission has received and approved the Administrator's final accounting report. Records shall be destroyed in accordance with disposal methods and procedures to be specified by the Federal Trade Commission. The Federal Trade Commission may, in its sole discretion, require that such records, in whole or in part, be transferred, in lieu of destruction, to the Federal Trade Commission.

XI.

IT IS FURTHER ORDERED that respondents shall, within sixty (60) days after service of this order, file with the Federal Trade Commission a report, in writing, setting forth in detail the manner and form in which they have complied or intend to comply with this order.

XII.

IT IS FURTHER ORDERED that this order will terminate on May 3, 2020, or twenty years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever later occurs; VOLUME 129 Decision and Order provided, however, that the filing of such complaint will not affect the duration of:

A. Any paragraph in this order that terminates in less than twenty years;

B. This order=s application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this paragraph. Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint had never been filed, except that the order will not terminated between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal. By the Commission.

ATTACHMENT A BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED [To be printed on respondents= letterhead] [date] Dear [purchaser for resale]:

DURA LUBE CORPORATION, ET AL. 1067 Decision and Order As you may be aware, on April 29, 1999, the Federal Trade Commission ("FTC") issued a complaint against Dura Lube Corporation, American Direct Marketing, Inc., Howe Laboratories, Inc., Crescent Manufacturing, Inc., National Communications Corporation, The Media Group, Inc., Herman S. Howard, and Scott Howard.

In its complaint, the FTC alleged that advertisements for Dura Lube Engine Treatment have made unsubstantiated claims that, compared to motor oil alone or motor oil treated with any other product, using Dura Lube Engine Treatment: (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%. In addition, the FTC alleged that Dura Lube Engine Treatment advertisements made an unsubstantiated claim that one treatment of Dura Lube Engine Treatment continues to protect the engine for up to 50,000 miles.

Further, the FTC alleged that Dura Lube Engine Treatment advertisements falsely claimed that tests prove that, compared to motor oil alone, using Dura Lube Engine Treatment: (1) Improves gas mileage; (2) Improves gas mileage by up to 35%; (3) Reduces emissions; (4) Prolongs engine life; (5) Reduces engine wear; and (6) Reduces the risk of serious engine damage when oil pressure is lost. The FTC also alleged that Dura Lube Engine Treatment advertisements falsely claimed that tests prove that one treatment of Dura Lube Engine Treatment continues to protect the engine for up to 50,000 miles. Finally, the FTC alleged that Dura Lube Engine Treatment advertisements set forth two deceptive demonstrations and a deceptive expert endorsement. VOLUME 129 Decision and Order The FTC also alleged that advertisements for Dura Lube Engine Treatment have made false and unsubstantiated claims that: (1) Dura Lube Engine Treatment does not contain any chlorinated compound; and (2) Dura Lube Engine Treatment has been tested by the U.S. Environmental Protection Agency. On [date] the FTC issued a consent order to cease and desist which prohibits certain claims for Dura Lube Engine Treatment. We consented to the issuance of the order for settlement purposes only and without admitting any of the FTC=s allegations that we violated the law. The order requires us to request that our distributors and wholesalers stop using or distributing advertisements or promotional materials containing claims challenged by the FTC. As one of our distributors or wholesalers, we are required to send [purchaser for resale] this letter. Specifically, the FTC order prohibits us in the future from making false claims that Dura Lube Engine Treatment (1) contains no chlorinated compound; and (2) has been tested by the U.S. Environmental Protection Agency. The order also requires that we have a reasonable basis for any performance claims we make for Dura Lube Engine Treatment or any other product for use in a motor vehicle. Finally, the order prohibits us from disseminating (1) any deceptive demonstrations regarding Dura Lube Engine Treatment or any other product, or (2) any expert endorsements regarding Dura Lube Engine Treatment or any other product for use in a motor vehicle. We request your assistance by asking you to discontinue using, distributing, or relying on any of your advertising or promotional material for Dura Lube Engine Treatment received from us prior to January 1, 2000. Please also notify any of your customers who resell these products and who may have such materials to discontinue using those promotional materials. Under separate cover, we will be sending you replacement promotional material that you will be able to use. You do not need to dispose of your existing inventory of Dura Lube Engine Treatment because we will send someone to your facility to replace the Dura DURA LUBE CORPORATION, ET AL. 1069 Analysis to Aid Public Comment Lube Engine Treatment labels and packaging with labels and packaging that comply with the FTC order shortly. If we receive information that you are continuing to use materials that do not comply with the FTC order, we are required to notify the FTC of your failure to comply with this request. Thank you very much for your assistance. Sincerely, [name] President [respondents] 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.

VOLUME 129 Analysis to Aid Public Comment 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.

DURA LUBE CORPORATION, ET AL. 1071 Analysis to Aid Public Comment The Complaint alleged that Respondents represented that product demonstrations in their advertising proved, demonstrated, or confirmed that, (a) 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 APete@ Conrad had endorsed the product based on a valid exercise of his expertise in the evaluation of automobile engine lubricants, when in fact Mr. Conrad did not have expertise in the evaluation and testing of automobile engine lubrication. 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 VOLUME 129 Analysis to Aid Public Comment 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 DURA LUBE CORPORATION, ET AL. 1073 Analysis to Aid Public Comment 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.

VOLUME 129 Complaint