Energy Star Program Susceptible to Fraud, Abuse, Says GAO Report

The Government Accountability Office got Energy Star certification for 15 bogus products, including a gas-powered alarm clock, in an investigation using four bogus manufacturing firms and fictitious people. The investigation showed that “Energy Star is for the most part a self-certification program vulnerable to fraud and abuse,” the agency said in a report released Friday.

Two of the Energy Star bogus firms created by GAO received requests from real companies to purchase products because the bogus firms were listed as Energy Star partners, the agency said. “This clearly shows how heavily American consumers rely on the Energy Star brand.” The GAO found that for its bogus products, “certification controls were ineffective primarily because Energy Star does not verify energy savings data reported by manufacturers.” Energy Star required only four of the 20 products that the GAO submitted for certification to be verified by an independent third party, it said. For two of the products, the controls were ineffective because the program required an “independent verification by a specific firm chosen by Energy Star,” the agency said.

In another case, the GAO was able to circumvent Energy Star controls by certifying that a product met a specific safety standard for ozone emission, it said. This defect was caused by Energy Star’s failure to verify information it was given, the GAO said. Among bogus products that were certified was a computer monitor that got approval within 30 minutes of submission, the agency said. That resulted in companies contacting the GAO’s fictitious company to buy products based on participation in the Energy Star program.

In response to the GAO findings, EPA and the Department of Energy told the GAO that there are “after-market tests and self-policing that ensure that standards are maintained,” GAO said. The GAO did not test or evaluate controls relating to products that were already certified and available to the public, the GAO clarified. But IGs at DOE and EPA have found in the past that “current Energy Star controls do not ensure products meet efficiency guidelines,” the GAO said. Responding to criticism, the EPA is now working on requirements for manufacturers to test their products in accredited labs and subject them to “verification testing” to ensure that certified products continue to comply with specifications.