FOR IMMEDIATE RELEASE:  August 29, 1990

            FTC AND ATTORNEYS GENERAL WARN CONSUMERS
                OF POSSIBLE ENERGY-RELATED SCAMS

     The Federal Trade Commission and the National Association of
Attorneys General today warned consumers to be on the lookout for
scams and rip-offs that take advantage of consumers' concerns about
supplies of petroleum following Iraq's invasion of Kuwait.  These
fraudulent schemes may range from phony gas-saving devices or other
energy-saving devices that don't work as advertised, to oil and gas
investment frauds.

     "Consumers should be especially cautious at this time about
products sold as energy-savers or good investment opportunities,"
said Janet D. Steiger, Chairman of the FTC.  "Unfortunately,
unscrupulous individuals often attempt to exploit situations like
the present one by taking advantage of consumers." 

     Virginia Attorney General Mary Sue Terry, President of the
National Association of Attorneys General, said, "With the Labor
Day Weekend ahead, and many Americans on the road, consumers should
stay away from devices which claim to significantly increase fuel
mileage.  They simply have not been found to be effective.  Your
best bet is a well-tuned car.  Invest dollars where the results are
proven."

     The FTC said that one very important thing that consumers can
do in times of gas concerns like this is to make sure that they're
not using more octane than their cars need, and should consult
their car owners' manuals to see if the manufacturer recommends a
low octane gasoline rather than a high octane gasoline.  Using a
lower octane gasoline can save consumers a lot of money.

     If you have been victimized, or have a complaint, please con-
tact the FTC or your Attorney General.  Write to the FTC at: 
Federal Trade Commission, Washington, D.C. 20580; or to your
Attorney General. 

                              # # #

MEDIA CONTACT:      Office of Public Affairs, FTC,
                    202-326-2180

                                
                       TIPS FOR CONSUMERS
                     ON ENERGY-RELATED SCAMS

             Issued by the Federal Trade Commission
                   and State Attorneys General

     The FTC and State Attorneys General have issued the following
tips to help consumers recognize and avoid the many energy-related
scams that are reportedly occurring across the country during the
current Middle East situation.

                      PRODUCTS AND SERVICES

Home Energy Savings Devices

     Marketers may claim that electric power savers, or "surge sup-
pressors," will save consumers a lot of money and conserve elec-
tricity used by household appliances and electric home heating and
air conditioning systems.  Others have marketed "duty cyclers" that
regularly turn furnaces off and on to try to save energy.  These
devices, which may be costly, have not been proven effective.

Solar Energy Products

     Know the people you are dealing with.  Some marketers may try
to sell solar energy systems designed for industrial uses to
unsuspecting home-owners, ultimately raising their utility bills
instead of lowering them.  Or they may try to sell products that
simply can't save as much money as claimed.  This field contains
a double whammy -- you should watch out not only for suspicious
products, but also look out for business opportunity ventures or
investments related to the sale, distribution and installation of
solar products.

Home Improvement

     There are a great many products on the market that will help
conserve energy, reduce your fuel bills, and are economical pur-
chases.  These range in cost from very little -- like caulking and
weatherstripping -- to very expensive -- installing attic and wall
insulation, buying storm windows, or purchasing a new and more
efficient furnace.  The energy savings you might obtain, however,
are highly variable.  It depends on the climate in your part of
the country, how well your house is already insulated, how it is
heated or cooled, and what your individual comfort level may be. 

     In the past, marketers have made exaggerated energy savings
claims for insulation products, storm windows, room heaters, resi-
dential siding, and solar heating systems.  Be careful in assessing
advertising claims so that you understand the basis for such
claims, and how they may apply to your specific situation.  If the
savings claims appear unrealistic, they probably are. 

     And remember, if you add insulation or take other energy con-
servation measures in your home, your total monthly utility bill
may not go down if the price of fuel is rising.  But it still may
cost you less than you would have paid, because you've made your
home more efficient.

"Gasoline Savings" Devices

     If gas prices rise, consumers may want to improve their fuel
mileage.  Marketers have offered all sorts of automotive gadgets,
devices, and magnets, as well as oil and gasoline additives,
intended to enhance fuel mileage.  Unfortunately, none of these
products has been found to significantly increase fuel economy. 
To get better mileage, you may want to check your tire pressure,
remove excess weight from your car's trunk, and get a tune-up.  

Investment Schemes

     When oil prices rise, oil and gold investment scams appear. 
When Wall Street is jittery, all kinds of investment scams appear. 
Look out for oil and gas partnerships, gold and silver mining
schemes, phony investments in oil drilling or bogus pipelines, or
any investment scam that promises a significantly higher rate of
return than you might expect from more traditional investments. 

     And always be cautious about investing sight unseen in some-
thing you're unfamiliar with -- rare coins, fine art, or gemstones,
for example.

Woodburning Stoves

     Again, sellers may make misleading or exaggerated energy per-
formance claims.  More important, they may not give you safety and
installation information.  Some woodburning stoves can pollute the
environment, and the use of woodburning stoves has been severely
curtailed by some local governments.

                      MARKETING TECHNIQUES 

     One difference consumers might see now from past energy crises
is that new marketing techniques are being used, such as telemark-
eting, "infomercials," and 900 numbers.  These techniques in them-
selves are not deceptive -- indeed, many reputable companies use
them -- but in the hands of unscrupulous individuals, they can hurt
consumers.

Telemarketing

     Telemarketers are those people who call you at home, offering
to sell you goods and services over the phone, or send you post-
cards telling you to call them right away.  Beware of those who
offer you "great bargains" out of the blue.  Unscrupulous tele-
marketers find it easy to offer whatever product or service is
"hot" at any given moment.  If they are offering water purifiers
today, they can easily switch to gas-saving devices tomorrow.

     You can protect yourself by:

     --   Never giving your credit card number over the phone, if
          you didn't initiate the call.

     --   Asking questions.  Get it in writing.

     --   Being suspicious.  Why would someone you don't know offer
          you an investment opportunity that they claim could
          triple your money?

     --   Finding out all costs involved before making a commit-
          ment.

     --   Being cautious of high-pressure tactics.  Do you really
          believe that this is a limited-time offer?

     --   Just hanging up the phone if in doubt!

"Infomercials"

     Infomercials are commercials that look like TV shows.  They
are usually about 30 minutes long, and resemble a talk show, like
Oprah or Donohue, or an investigative show, like 60 Minutes.  Many
infomercials are upfront about being an ad -- they say so, fre-
quently.  But, unfortunately, many don't do that.  Be suspicious
if one product is the only topic of discussion on the "show" and
also the only item advertised, especially if they offer a number
to call to place an order.

"900" Numbers

     Unlike toll-free "800" numbers, the consumer is billed for
"900" numbers at rates much higher than regular long distance
rates.  The seller sets the price of these calls, which can run
from $2 to $45 a minute -- or higher!  If you are calling a "900"
number, find out first how much the call will cost, and remember
to add that to the cost of the product.  It might be a lot more
expensive than you think.

     Some companies also use "976" numbers.  These are local calls,
but they carry the same charges as "900" numbers.  It might be
cheaper to look in the telephone book and see if they have a regu-
lar number.

                           PROTECTIONS

     Consumers should be their own first line of defense --
remember, if it sounds too good to be true, it probably is!  But
the federal and state governments also offer legal protections. 
Here are a few specific ones. 

Appliance Labeling Rule

     If you need to buy a new major home appliance, and also want
to save energy, look for the bright yellow label, called an
"EnergyGuide," on appliances in stores.  The FTC's Appliance Label-
ing rule requires that these labels disclose the energy costs or
operating efficiency for each appliance.  Again, remember to factor
the long-term energy costs into your purchasing decision.

Gasoline Octane Rule

     All gasoline pumps must disclose the octane content of the
gas.  A good way to save money with rising gas prices is to buy
only the octane level gas you really need.  Check your car's
owner's manual to see what the manufacturer recommends.  But indi-
vidual cars may vary.  If your engine is "pinging" or "knocking,"
you might need either a higher octane or a tune-up.  Remember, the
higher the octane, the higher the price.  So don't use a higher
octane than you need -- it will cost more and it won't help your
car at all. 

R-Value Rule

     Adding insulation to your home can help lower your energy use. 
The FTC's R-value Rule can help you shop for insulation effective-
ly.  Under this Rule, all home insulation labels must disclose the
product's R-value.  "R" stands for resistance to heat flow, so the
higher the R-value, the higher the insulating power of the product. 
But, you may not need the highest R-value you can find.  How much
you need depends on where you live, how much insulation you already
have, and other factors.  There might also be cheaper ways of
reducing energy use than buying more insulation.  Ask to see the
insulation fact sheet about R-values for more information.

Cooling-Off Rule

     If someone knocks on your door and offers to sell you storm
windows, energy-saving siding, or other products or services
costing more than $25, you have certain rights under the Cooling-
Off Rule.  If you want the product or service, be sure the seller
provides you with a notice of cancellation along with the contract. 
Under the Rule, the seller must give you three business days to
change your mind, cancel the contract, and get your money back. 
And Saturday counts as a business day.

Energy Fraud Clearinghouse

     The FTC and the Attorneys General are reactivating the Energy
Fraud Clearinghouse that was created in 1983, which is a way of
sharing information on possible fraudulent energy-related products
and advertising.  It helps state, local and federal law enforcement
officials to keep on top of emerging problems related to the grow-
ing number of energy-related products and services on the market. 
If you have been the victim of an energy-related scam, please
contact your Attorney General so that your experience may be put
into the data base.

     These are only a few of the specific protections consumers
have.  The FTC has wide-ranging jurisdiction over consumer
protection laws, ranging from advertising to credit to marketing
practices, and the states have similar mandates to protect their
citizens.  The FTC and the Attorneys General very much want to help
consumers.

Contact:

          Federal Trade Commission
          Washington, D.C. 20580
or

          Your State Attorney General
          Office of Consumer Protection
          Your State Capitol
          (Most Attorneys General have toll-free
          consumer hotlines -- check with your local
          directory assistance)