Headline: NAD Recommends Honeywell Drop ‘Universal Compatibility’ Claim for Programmable Thermostats; Advertiser to Appeal

New York, NY – Nov. 7, 2013 – The National Advertising Division has recommended that Honeywell International, Inc., discontinue certain claims that the company’s Programmable Thermostats are “universally compatible.” Honeywell said it will appeal that finding to the National Advertising Review Board.

Separately, NAD has recommended that challenger Nest Labs Inc., pursue questions about “Energy Star” product labeling – an issue NAD did not decide on the merits – with the Environmental Protection Agency.

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 for the products – published in product guides and made on product packaging, in-store advertisements, the Honeywell website, and reseller websites – were challenged before NAD by Nest Labs, Inc., a maker of competing programmable thermostats.

NEST challenged claims that included:

  •  “Certified by the ‘Energy Star’ program.”
  •  “Save up to 33% [or 35%] on your energy bill.”
  •  “Rated overall best brand of programmable thermostats.”
  •  “Universally Compatible”
  •  “Compatible with heating and cooling systems.”
  •  “Designed to install in 15 minutes or less.”
  •  “‘Exclusive” Honeywell thermostat features.

Central to the challenger’s concerns was the issue of “Energy Star” certification.

In May 2009, the Environmental Protection Agency (EPA) announced it was suspending Energy Start specification for programmable thermostats and that company should stop using the Energy Star name and mark in association with all products manufactured on or after December 31, 2009.

Nest asserted that, four years later, Honeywell continued to market devices with the Energy Star certification seal through a number of retailers, and offered samples of product packaging bearing this seal. NAD accepted the advertiser’s written assurances that no new product has been shipped since 2009 bearing the Energy Star certification.

NAD determined, though, that the issue of Honeywell’s purported continued use of the Energy Star certification stems from a directive issued by the EPA in 2009. Consequently, NAD did not address the merits of Nest’s concerns, but recommended that the challenger pursue this unresolved matter to the governmental agency issuing the directive in the first instance, i.e. the EPA.

Key to NAD’s review was the question of whether Honeywell’s advertising implied that its thermostats are compatible with all configurations of heating, cooling and heat pump systems or that the advertised thermostats could be installed by a significant number of users within 15 minutes or less.

Following its review, NAD determined that the advertising claim, “Universally Compatible” reasonably conveyed the message that the advertised thermostats are compatible with all or virtually all heating and cooling systems. NAD further determined that such a message that was not supported by the evidence in the record and recommended that the claims be discontinued.

NAD recommended that the advertiser modify the claim “compatible with heating and cooling and heat pump systems,” to identify heating or cooling systems with which its thermostats either are or are not compatible. Further, NAD recommended that the advertiser discontinue its claim that its thermostats are “designed to install in 15 minutes or less.”

Honeywell, at the outset of NEST’s challenge, argued that certain claims at issue had been or were being discontinued before the challenge was filed. NAD noted in its decision that it appreciated Honeywell’s voluntary discontinuance of the claim “Rated overall Best Brand of Programmable Thermostats,” as well as the challenged exclusivity claims, and administratively closed its review of those claims.

NAD noted its appreciation that the advertiser voluntarily discontinued the claim, “Save up to 33% on your energy bill.” NAD recommended that the advertiser employ its best efforts to contact third-party websites and retailers where the claim appears, advise them to immediately discontinue use of the claim and provide them with new artwork for all in-store displays for its Programmable Thermostats.

Finally, NAD recommended that the challenger pursue with the Environmental Protection Agency the unresolved matter of compliance with the EPA’s directive to discontinue use of the Energy Star certification on product packaging, in-store displays, and certain third-party websites.

Honeywell, in its advertiser’s statement, said the company “will appeal NAD’s recommendation on claims related to the ‘universal’ compatibility of our thermostats. That language is the industry standard, is readily understood by consumers, and is used at the request of retailers who want product packaging that is easy for buyers to understand. Honeywell believes that removing this language would do a disservice to consumers.”