Nonprofit Management LLC D/B/A Tested Green

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IN THE MATTER OF NONPROFIT MANAGEMENT LLC, D/B/A TESTED GREEN AND JEREMY RYAN CLAEYS CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket No. C-4315; File No. 102 3064 Filed February 23, 2011 — Decision February 23, 2011 This consent order relates to allegations that Nonprofit Management LLC, doing business as Tested Green, and Jeremy Ryan Claeys (“Tested Green’) in their advertising, marketing and selling of Tested Green environmental certifications represented that the products, services, and programs bearing the certification had been independently and objectively evaluated based on their environmental attributes, when, in fact, they had not. The complaint alleges that, by furnishing businesses with the certification and the tools to advertise it, respondents provided the means and instrumentalities for the commission of deceptive acts and practices, and thus committed a deceptive act in violation of Section 5 of the Federal Trade Commission Act. In addition, the complaint alleges that Tested Green deceived consumers by representing that endorsements by the National Green Business Association and the National Association of Government Contractors were independent, when, in fact, Tested Green owns and operates both organizations. The consent order prohibits Tested Green from misrepresenting the fact that they have, or a third party has, evaluated a product based on its environmental benefits; that respondents have the expertise to evaluate the environmental benefits of a product; the number of certifications they issue; and that a product is endorsed by an independent organization. The consent order also bars Tested Green, in connection with the marketing of any product or certification, from providing others with the means and instrumentalities to make any false or misleading statement.

Participants For the Commission: Elsie B. Kappler and James A. Kohm. For the Respondent: Pro se.

NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 145 Complaint COMPLAINT The Federal Trade Commission, having reason to believe that Nonprofit Management LLC and Jeremy Ryan Claeys (collectively “Respondents”) have violated provisions of the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., and it appearing to the Commission that this proceeding is in the public interest, alleges: 1. Respondent Nonprofit Management LLC, also doing business as Tested Green, is a Delaware limited liability corporation with a principal office at 1250 Connecticut Avenue, NW, Suite 200, Washington, DC 20036.

2. Respondent Jeremy Ryan Claeys, also doing business as Tested Green, is an officer and member of Nonprofit Management LLC. Individually, or in concert with others, he formulates, directs, controls, or participates in the policies, acts, or practices of Nonprofit Management LLC. His principal office, doing business as Tested Green, is at 1250 Connecticut Avenue, NW, Suite 200, Washington, DC 20036.

3. The acts and practices of Respondents alleged in this complaint have been in or affecting commerce, as “ccommerce”’ is defined in Section 4 of the Federal Trade Commission Act. 4. From approximately February 2009 through April 2010, Respondents conducted business as “Tested Green.” In this capacity, Respondents advertised, marketed, offered for sale, and sold the Tested Green Certification, depicted below: F) TESTED GREEN 5. Respondents advertised and sold the Tested Green Certification to the public throughout the United States via their website, www.testedgreen.com (“Tested Green website’), and via VOLUME 151 Complaint emails that linked to the Tested Green website that Respondents repeatedly sent to approximately 30,000 persons. 6. Respondents claimed on their website that Tested Green was “endorsed by the National Green Business Association and the National Association of Government Contractors.” 7. The National Green Business Association and National Association of Government Contractors are names for businesses owned and operated by Respondent Jeremy Claeys. 8. Respondents touted Tested Green on their website as “the nation’s leading certification program for businesses that produce green products or use green processes in the manufacture of goods and services,” stating that it “served over 45,000 certifications in the United States.”

9. Respondents repeated this claim in the mass emails they sent during 2009, boasting that Tested Green was “the nation’s leading certification for green businesses with over 45,000 certifications in the United States.” In 2010, Respondents modified their mass emails to state that Tested Green was “the nation’s leading certification for green businesses with over 65,000 certifications in the United States.”

10. Respondents promised on the Tested Green website that the businesses that purchased Tested Green Certifications would have access to certain “promotional tools”: Tested Green provides a simple way to certify your business as “green” and provides a package of advertising tools to show you have a verified green product, service or manufacturing process. Our unique certification gives you a branded verification website that you can customize for your business. Certification seals are available that automatically link to your custom site to verify your green status.

NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 147 Complaint ok OK Once you receive certification, several tools are available to promote your green certification. Tested Green maintains a certification verification page for every certified business. This customized page is yours to edit and promote to show you are a verified green business.

11. Tested Green offered two types of certifications: “Rapid Certify” and “Pro Certify,’ at an annual cost of $189.95 and $549.95, respectively.

12. According to the Tested Green website, to receive either certification:

you will answer a series of questions about the green activities your business participates in. Those answers will appear on your certification page along with other business information.

13.In the case of the “Pro” Certification, Respondents represented that businesses were required to supply documentation and that “a site visit may be required to verify the green practices are legitimate and meet universal green standards.” 14. No applicant for a Tested Green Certification was required to answer a series of questions about the green activities his business participates in, and no applicant for “Pro” Certification was required to submit documentation or subjected to a site visit as a condition of certification. All an applicant needed to do was to provide name and address information, and pay the indicated amounts via credit card. 15. Every one of the 129 persons that applied for Tested Green Certification and paid the designated amounts was given a Tested Green Certification.

16. Immediately upon certification, Respondents provided the 129 businesses with various tools to promote their Tested Green- VOLUME 151 Complaint certified status, including access to the Tested Green logo via HTML code, and customized “certification verification” profiles for their businesses.

VIOLATIONS OF THE FTC ACT COUNT I MEANS AND INSTRUMENTALITIES 17. Respondents’ Tested Green Certification represented expressly or by implication that the products, services, programs, or entities bearing such certification had been independently and objectively evaluated based on their environmental attributes or benefits.

18. In truth and in fact, the products, services, programs, and entities bearing the Tested Green certification had not been independently and objectively evaluated based on_ their environmental attributes or benefits.

19. By furnishing businesses with Tested Green Certifications, along with access to the HTML code for the Tested Green logo, and a “certification verification page” that such businesses could edit and use to promote their Tested Green certified status, Respondents provided businesses with the means and instrumentalities for the commission of deceptive acts and practices. 20. Therefore, Tested Green’s practices, as described in Paragraphs 17-19, above, constitute deceptive acts and practices in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a).

COUNT II DECEPTION IN USE OF ENDORSEMENTS 21. Through the means described in Paragraphs 4-6, above, Respondents represented, expressly or by implication, that the National Green Business Association and the National Association NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 149 Complaint of Government Contractors are independent from Respondents. 22. In truth and in fact, these organizations are not independent from Respondents, but are owned and operated by them. 23. Therefore, the representation in Paragraph 21 is false and misleading.

COUNT Ill DECEPTION IN FAILURE TO DISCLOSE MATERIAL FACTS IN USE OF ENDORSEMENTS 24. Through the means described in Paragraphs 4-6, above, Respondents represented, expressly or by implication, that its alleged endorsers, the National Green Business Association and National Association of Government Contractors, are independent from Respondents.

25. Respondents failed to disclose, however, that they own and operate the National Green Business Association and National Association of Government Contractors. 26. The facts described in Paragraph 25 would have been material to consumers in their purchasing decisions. 27. Therefore, Respondents’ failure to disclose these facts, in light of the representations made, constitutes a deceptive act or practice, in or affecting commerce, in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

THEREFORE, the Federal Trade Commission, on this twentythird day of February, 2011, has issued this complaint against respondent.

By the Commission.

VOLUME 151 Decision and Order DECISION AND ORDER The Federal Trade Commission (““Commission’’) having initiated an investigation of certain acts and practices of the Respondents named in the caption hereof, and the Respondents having been furnished thereafter with a copy of a draft complaint that the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the Respondents with violation of the Federal Trade Commission Act, 15 U.S.C. § 45 et seq.; and The Respondents and counsel for the Commission having thereafter executed an agreement containing a consent order (“consent agreement’), an admission by the Respondents of all the jurisdictional facts set forth in the aforesaid draft complaint, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined that it has reason to believe that the Respondents have violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such consent agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: 1. Respondent Nonprofit Management LLC, also doing business as Tested Green, is a Delaware limited liability corporation with a principal office at 1250 Connecticut Avenue, NW, Suite 200, Washington, DC 20036. 2. Respondent Jeremy Ryan Claeys, also doing business as Tested Green, is an officer and member of Nonprofit Management LLC. Individually, or in concert with others, he formulates, directs, controls, or participates in NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 151 Decision and Order the policies, acts, or practices of Nonprofit Management LLC. His principal office, doing business as Tested Green, is at 1250 Connecticut Avenue, NW, Suite 200, Washington, DC 20036.

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: 1.

Unless otherwise specified, “Respondents” shall mean Nonprofit Management LLC, also doing business as Tested Green, its successors and assigns; and Jeremy Ryan Claeys, individually, also doing business as Tested Green, and as an officer and member of Nonprofit Management LLC.

“Certification” shall include any seal, logo, emblem, shield, or other insignia that expresses or implies approval or endorsement of any product, package, service, practice, or program, or any attribute thereof. “Clearly and prominently” shall mean:

A. Intextual communications (e.g., printed publications or words displayed on the screen of a computer), the required disclosures are of a type, size, and location sufficiently noticeable for an ordinary consumer to read and comprehend them, in print that contrasts with the background on which they appear; B. In communications disseminated orally or through audible means (e.g., radio or streaming audio), the VOLUME 151 Decision and Order required disclosures are delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend them;

C. In communications disseminated through video means (e.g., television or streaming video), the required disclosures are in writing in a form consistent with subparagraph (A) of this definition and shall appear on the screen for a duration sufficient for an ordinary consumer to read and comprehend them, and in the same language as the predominant language that is used in_ the communication;

D. In communications made through interactive media, such as the Internet, online services, and software, the required disclosures are unavoidable and presented in a form consistent with subparagraph (A) of this definition, in addition to any audio or video presentation of them; and E. In all instances, the required disclosures are presented in an understandable language and syntax, and with nothing contrary to, inconsistent with, or in mitigation of the disclosures used in any communication of them.

“Endorsement” means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 153 Decision and Order and may be an individual, group, or institution. 5. “Environmental certification” shall mean any certification that expresses or implies that a product, package, service, practice, or program is environmentally friendly, environmentally superior, or environmentally preferable to other products, packages, services, practices, or programs; or expresses or implies other environmental attributes or benefits. 6. “Material connection” shall mean any relationship that materially affects the weight or credibility of any endorsement and that would not be reasonably expected by consumers.

7. “Tested Green Certification” shall refer to the certification issued by Respondents that is depicted below:

F) TESTED GREEN I.

MAKING MISREPRESENTATIONS IT IS HEREBY ORDERED that Respondents, directly or through any corporation, partnership, subsidiary, division, trade name, or other device, and their officers, agents, servants, employees, and all persons or entities in active concert or participation with them who receive actual notice of this order, by personal service or otherwise, in connection with the labeling, advertising, marketing, promotion, offering for sale, sale, or distribution of any product, package, certification, service, practice, or program, are permanently restrained and enjoined from making or assisting others in making, expressly or by implication, orally or in writing, any misrepresentation, including misrepresenting: VOLUME 151 Decision and Order A. the fact that, or degree to which, Respondents have, or a third party has, evaluated a product, package, service, practice, or program based on its environmental benefits or attributes;

B. that Respondents have, or a third party has, the appropriate expertise to evaluate the environmental benefits or attributes of a product, package, service, practice, or program;

C. the number of certifications issued by Respondents; or D. that a product, package, certification, service, practice, or program is endorsed by an independent person or organization.

Il.

MEANS AND INSTRUMENTALITIES IT IS FURTHER ORDERED that Respondents, directly or through any corporation, partnership, subsidiary, division, trade name, or other device, and their officers, agents, servants, employees, and all persons or entities in active concert or participation with them who receive actual notice of this order, by personal service or otherwise, in connection with the labeling, advertising, marketing, promotion, offering for sale, sale, or distribution of any product, package, certification, service, practice, or program, are permanently restrained and enjoined from providing to others the means and instrumentalities to make, expressly or by implication, orally or in writing, any false or misleading statement. Il.

DISCLOSURE OF MATERIAL CONNECTION BETWEEN ENDORSER AND ENDORSED PERSON OR ENTITY IT IS FURTHER ORDERED that Respondents, directly or through any corporation, partnership, subsidiary, division, trade name, or other device, and their officers, agents, servants, employees NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 155 Decision and Order and all persons or entities in active concert or participation with them who receive actual notice of this order, by personal service or otherwise, in connection with the labeling, advertising, marketing, promotion, offering for sale, sale, or distribution of any product, package, certification, service, practice, or program, shall not make any representation, in any manner, expressly or by implication, about any user or endorser of such product, package, certification, service, practice, or program unless they disclose, clearly and prominently, a material connection, when one exists, between such user or endorser and the Respondents or any other individual or entity labeling, advertising, marketing, promoting, offering for sale, selling, or distributing such product, package, certification, service, practice, or program.

IV.

IT IS FURTHER ORDERED that Respondent Nonprofit Management LLC, and its successors and assigns, and Respondent Jeremy Ryan Claeys shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Commission for inspection and copying:

A. All advertisements, labeling, packaging and promotional materials containing the representation; B. All materials that were relied upon in making and disseminating the representation;

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and_ other communications with consumers or with governmental or consumer protection organizations; and VOLUME 151 Decision and Order D. All acknowledgments of receipt of this order, obtained pursuant to Part V.

V.

IT IS FURTHER ORDERED that Respondent Nonprofit Management LLC, and its successors and assigns, and Respondent Jeremy Ryan Claeys, shall deliver a copy of this order to all current and future principals, members, officers, directors, and managers; and all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order. Respondents shall secure from each such person a signed and dated statement acknowledging receipt of the order, with any electronic signatures complying with the requirements of the E-Sign Act, 15 U.S.C. § 7001, et seg. Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. VI.

IT IS FURTHER ORDERED that Respondent Nonprofit Management LLC, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change in the corporation or any business entity that the corporation directly or indirectly controls, or has an ownership interest in, that may affect compliance obligations arising under this order, including but not limited to formation of a new business entity; a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor entity; 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 business or corporate name or address. Provided, however, that, with respect to any proposed change about which the Respondent learns less than thirty (30) days prior to the date such action is to take place, Respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. Unless otherwise directed by a representative of the Commission, all notices NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 157 Decision and Order required by this Part shall be sent by overnight courier (not the U.S. Postal Service) to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, Re: FTC v. Nonprofit Management LLC and Jeremy Ryan Claeys, FTC Docket No. C-4315. Provided, however, that, in lieu of overnight courier, notices may be sent by first-class mail, but only if electronic versions of such notices are contemporaneously sent to the Commission at Debrief @ftc.gov.

VII.

IT IS FURTHER ORDERED that Respondent Jeremy Ryan Claeys, for a period of ten (10) years after the date of issuance of this order, shall notify the Commission of the discontinuance of his current business or employment, or of his affiliation with any new business or employment. The notice shall include Respondent’s new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. Unless otherwise directed by a representative of the Commission, all notices required by this Part shall be sent by overnight courier (not the U.S. Postal Service) to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, Re: FTC v. Nonprofit Management LLC and Jeremy Ryan Claeys, FTC Docket No. C-4315. Provided, however, that, in lieu of overnight courier, notices may be sent by first-class mail, but only if electronic versions of such notices are contemporaneously sent to the Commission at Debrief @ftc.gov. VII.

IT IS FURTHER ORDERED that Respondent Nonprofit Management LLC, and its successors and assigns, and Respondent Jeremy Ryan Claeys, within sixty (60) days after the date of service of this order, shall each file with the Commission a true and accurate report, in writing, setting forth in detail the manner and form in which Respondents have complied with this order. Within ten (10) VOLUME 151 Decision and Order days of receipt of written notice from a representative of the Commission, Respondents shall submit additional true and accurate written reports.

IX.

This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Part in this order that terminates in less than twenty (20) 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 Part.

Provided, further, that 1f such complaint is dismissed or a federal court rules that the Respondents 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 Part as though the complaint had never been filed, except that the order will not terminate 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.

NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 159 Analysis to Aid Public Comment ANALYSIS OF PROPOSED CONSENT ORDER TO AID PUBLIC COMMENT The Federal Trade Commission has accepted, subject to final approval, an Agreement Containing Consent Order from Nonprofit Management LLC and Jeremy Ryan Claeys, also doing business as Tested Green (“respondents”).

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 and take appropriate action or make final the agreement’s proposed order. This matter involves the advertising, marketing, and sale of environmental certifications. From approximately February 2009 to April 2010, respondents marketed the Tested Green certification using their website, www.testedgreen.com, as well as mass e-mails linking to their website. The marketing claimed that Tested Green was the “nation’s leading certification program with over 45,000 certifications in the United States.” However, respondents never tested any of the companies to which they issued certifications, and certified anyone willing to pay a designated fee of either $189.95 for a “Rapid” certification, or $549.95 for a “Pro” certification. Immediately upon certifying companies, respondents provided them with HTML text for the Tested Green logo and a “certification verification page” that they could, in turn, use to advertise their Tested Green certified status. Respondents also claimed that Tested Green was endorsed by the National Green Business Association (“NGBA”) and the National Association of Government Contractors (“NAGC’”’), two organizations which they own and operate. The Commission alleges that the Tested Green certification constituted an express or implied representation that the products, services, programs, or entities bearing the certification had been independently and objectively evaluated based on_ their VOLUME 151 Analysis to Aid Public Comment environmental attributes or benefits, when, in fact, they had not. Additionally, by furnishing businesses with the certification and the tools to advertise it, respondents provided such businesses with the means and instrumentalities for the commission of deceptive acts and practices, and accordingly, themselves committed a deceptive act in violation of Section 5 of the FTC Act. The Commission also alleges that by stating that the NGBA and the NAGC endorsed Tested Green, respondents represented expressly or impliedly that they were independent from these organizations, when, in fact, they own and operate NGBA and NAGC. Therefore, respondents’ statement of endorsement by NGBA and NAGC was false and misleading, in violation of Section 5. Similarly, in light of respondents’ express and implied representation that these organizations were independent, respondents’ failure to disclose their relationship to NGBA and NAGC was deceptive, in violation of Section 5. Part I of the proposed order prohibits respondents from misrepresenting: (1) the fact that, or degree to which, they have, or a third party has, evaluated a product, package, service, practice, or program based on its environmental benefits or attributes; (2) that respondents have, or a third party has, the appropriate expertise to evaluate the environmental benefits or attributes of a product, package, service, practice, or program; (3) the number of certifications issued by respondents; and (4) that a product, package, certification, service, practice, or program is endorsed by an independent person or organization.

Part II of the proposed order bars respondents, in connection with the labeling, advertising, marketing, promotion, offering for sale, sale, or distribution of any product, package, certification, service, practice, or program, from providing others with the means and instrumentalities to make, expressly or impliedly, any false or misleading statement.

Part II of the proposed order bars respondents from making any representation, expressly or by implication, about any user or NONPROFIT MANAGEMENT LLC d/b/a TESTED GREEN 161 Analysis to Aid Public Comment endorser of a product, package, certification, service, practice, or program, unless they clearly and prominently disclose a material connection with such user or endorser, where one exists. Parts IV through VIII of the proposed order are reporting and compliance provisions. Part IV requires respondents to retain documents relating to their compliance with the order. Part V requires dissemination of the order to all current and future principals, officers, directors, managers, employees, agents, and representatives having responsibilities relating to the subject matter of the order. Part VI ensures notification to the FTC of changes in respondent Nonprofit Management’s corporate status. Part VII mandates that respondent Claeys notify the FTC of any changes in his business affiliations or employment. Part VIII mandates that respondents submit a report to the Commission detailing their compliance with the order. Part IX provides that the order expires after twenty (20) years, with certain exceptions. The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the proposed order or to modify its terms in any way.

VOLUME 151 Complaint