NAD Refers Advertising by GreenFiber to FTC After Company Declines to Participate in NAD Proceeding

New York, NY – Aug. 20, 2013 – The National Advertising Division has referred advertising claims made by GreenFiber, LLC, for its cellulose insulation to the Federal Trade Commission for further review. The company declined to participate in a review of its advertising claims.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of better Business Bureaus.

Claims made on product packaging, and in point-of-sale materials and website advertising were challenged by Johns Manville, a competing maker of insulation.

Claims at issue included:

  •  “GreenFiber”
  •  “environmentally friendly”
  •  “eco-friendly”
  •  “non-toxic”
  •  “no harmful chemicals”
  •  “natural” or “all natural”
  •  claim that fiber glass is as harmful as asbestos and formaldehyde
  •  claim that only cellulose insulation can be installed with “zero waste”
  •  “Proven 57% More Fire Resistant vs. Fiberglass”

The challenger argued that GreenFiber’s product name, the pervasive “green” imagery used in advertising and the “environmentally friendly” claims found on its product packaging, point-of-sale material, and website, all conveyed an unqualified message of general environmental benefit that is misleading to consumers.

GreenFiber declined to participate in the NAD proceeding, arguing that prior to Johns Manville’s challenge, it had already committed to modifying seven of the nine express claims challenged. GreenFiber contended that Johns Manville’s objections to its “fire resistance” claim was frivolous and argued that the fire resistance issue were of such a technical character that NAD could not conduct a meaningful analysis.

While NAD appreciated the advertiser’s representation that it would discontinue or modify some of the challenged claims, NAD noted that the advertiser declined to participate in the self-regulatory proceeding and intended to continue disseminating two of the challenged claims. In light of the advertiser’s position, NAD referred the matter to the FTC for possible law enforcement action.