FTC Settles Charges against Florida
Telemarketer of Water Filtration Units

FTC News Release
December 20, 1991

Ion Technology Systems, Inc., a Fort Lauderdale, FL, telemarketer, has agreed to settle Federal Trade Commission charges that it employed a variety of misrepresentations in selling its water filters to consumers. Under the proposed settlement, the defendants would be prohibited from making misrepresentations alleged in the FTC complaint and would be required to disclose any material terms and conditions of purchasing any products or services they sell in the future.

The corporation has admitted to committing the acts charged in the FTC complaint, which also named Ion Technology's principal officers, Pamela J. Besh, Kenneth Baer and John Ross.

According to the complaint, filed in August 1990, the defendants represented that, among other things, their water filtration units removed at least 98 percent of a wide range of contaminants and that the granular-activated carbon in the water filter would kill or eliminate bacteria in 10,000 or more gallons of water for at least four years. In fact, the complaint charged, the units failed to significantly reduce contaminant levels or inhibit or prevent bacterial growth for the specified period. In addition, the FTC alleged, the defendants represented that the water filtration unit was registered with — or approved or recommended by — the US Environmental Protection Agency, and that pending federal legislation would soon require every US household to have a water filter. The complaint charges that these claims were false.

Finally, according to the FTC complaint, the defendants offered full refunds to dissatisfied customers and represented that the state of Florida had certified that their telemarketing promotions were in conformity with state law. In fact, the state of Florida had issued no such validation of the defendants' marketing practices and, in numerous instances, Ion Technology did not provide requested customer refunds, the FTC charged.

Under the proposed consent judgment settling the charges, the defendants would be prohibited from making any future unsubstantiated claims or misrepresentations regarding any product or service they offer for sale, or any incentive or award they offer in conjunction with a sales promotion. In addition, the settlement would require the defendants to fully and clearly disclose — before accepting payment from a prospective purchaser — all material terms, limitations, conditions or restrictions on buying any product or service. The settlement also would require the defendants to disclose to consumers their right to cancel a purchase and receive a full refund within 30 days. Further, the defendants would be ordered to accept any returned product or service-cancellation request, and to process all credit card or cash refunds within seven days of receipt.

In addition, the proposed consent judgment would require Ion Technology Systems, Inc. to pay to the Commission $7.5 million to provide compensation for consumers, although FTC staff has determined that the company presently does not have sufficient assets to satisfy the judgment.

Finally, individual defendants Besh, Baer and Ross would be ordered to pay the Commission $50,000 for consumer redress under the settlement agreement.

The proposed consent judgment was filed by the FTC in the US District Court for the Southern District of Florida, in Fort Lauderdale, on December 20. It is subject to court approval.

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