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FTC Sues Speedway Motorsports and Oil-Chem Subsidiary
Performance Claims For zMax Auto Additives Are Unsubstantiated, FTC Charges
The Federal Trade Commission has filed suit in U. S. District Court seeking to halt false and misleading advertising for zMax auto additives and has asked the court to order refunds to consumers who bought the products. The agency alleges that enhanced performance claims for the product are unsubstantiated, that tests cited to support performance claims actually demonstrated that motor oil treated with zMax produced more than twice as much bearing corrosion than motor oil alone, and that the three different products - an engine additive, a fuel line additive and a transmission additive - were all actually tinted mineral oil. zMax is manufactured by Oil-Chem, a wholly-owned subsidiary of Speedway Motorsports, Inc. Speedway, based in Concord, North Carolina, operates NASCAR race tracks in the South and in California, in addition to marketing the zMax products.
According to the FTC complaint, since at least May 1999, zMax ran infomercials touting its "Power System," a $39 package of three additives to be used in the engine, fuel line and transmission of automobiles. The infomercials feature testimonials from consumers and race car drivers making claims such as, "I was averaging about 22 miles to the gallon on the highway. I installed the zMax and so I jumped right up to about 28 miles per gallon;" and "zMax guarantees a minimum of 10 percent gas mileage increase." Other marketing and promotional pieces claim, "zMax with LinKite has the scientific, CRC L38 proof it takes your car to the MAX!" and "Why zMAX Works - Cuts carbon build-up on valve stems 66%; Lowers wear on valve stems 66%; Lowers wear on piston skirts 60%; Reduces blow-by leakage 17.7%; Increases combustion efficiency 9.25%; Lowers fuel consumption 8.5% - Results of an independent CRC L38 test."
According to the FTC, the CRC L38 test is a standard auto industry tool to measure the bearing corrosion protection properties of motor oils. In February/March 1997, an independent laboratory performed two CRC L38 tests of zMax for Speedway and Oil Chem. In those tests, motor oil treated with zMax produced more than twice as much bearing corrosion as motor oil alone. The complaint also states that the defendants fabricated one "report" from the two test reports, eliminating the bearing corrosion results and all other negative test results, and then used that report and the "official laboratory results" - similarly edited to remove detrimental data results - as sales tools in the infomercial and on the zMax Web site.
The FTC's complaint alleges that the defendants did not possess and rely on reasonable substantiation for the following claims in the infomercial, on the Web site and in brochures that zMax:
increases gas mileage;
increases gas mileage by a minimum of 10%
reduces engine wear;
reduces or eliminates engine wear at startup;
reduces engine corrosion;
extends engine life; and
reduces emissions.
The agency's complaint also alleges that the defendants falsely represent that the results of the CRC L38 test proved that zMax:
increases gas mileage;
reduces engine wear;
extends engine life;
lowers fuel consumption by 8.5%
lowers wear on valve stems by 66%
lowers wear on piston skirts by 60%; and
cuts carbon build-up on valve stems by 66%.
Finally, the FTC charges that in consumer testimonials and endorsements in their advertising, the defendants did not have substantiation for the representation that the endorsers' experiences were, "The actual and current opinions, findings, beliefs, and/or experiences of those consumers; and the typical or ordinary experience of members of the public who use the product."
The FTC is asking the court to bar the defendants from violating the FTC Act, which prohibits deceptive acts and to order consumer redress or require that they give up their ill-gotten gains.
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