Fifteen phony products -- including a gasoline-powered alarm clock -- won a label from the government certifying them as energy efficient in a test of the federal "Energy Star" program. Investigators concluded the program is "vulnerable to fraud and abuse," says the Associated Press.
- A report released Friday said government investigators tried to pass off 20 fake products as energy efficient, and only two were rejected; three others did not get a response.
- Four phony GAO companies were able to become Energy Star partners, giving them access to the program's logos and other promotional resources.
- The program, run by the Energy Department and Environmental Protection Agency (EPA) is supposed to identify energy-efficient products to help consumers.
- Tax credits and rebates serve as incentives to buy Energy Star products.
Sen. Susan Collins of Maine, the top Republican on the Senate Homeland Security and Governmental Affairs Committee who requested the study, said that "taxpayers are shortchanged twice" when Energy Star products are not thoroughly vetted -- when consumers are willing to pay more for the products, and when taxpayer dollars are spent encouraging the purchases, says the Associated Press.
- According to the GAO, the EPA and Energy Department told investigators in briefings that although the "Energy Star" program is based on manufacturers certifying their products meet efficiency standards, that efficiency is ensured through aftermarket tests and self-policing. The GAO did not look at those efforts.
- The GAO did note that the two agencies said they are shifting to a more rigorous upfront screening process. In a news release last week, they announced additional testing of products and an ongoing verification program.
The two agencies acknowledged the GAO report raised important issues."That's why we have started an enhanced testing program and have already taken enforcement actions against companies that have violated the rules," the agencies' statement said.
Source: Frederic J. Frommer, "Phony products impress federal energy program," Associated Press, March 26, 2010.
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