FCC Smacks RadioShack, Others for Label Omissions

Retailers Failed to Properly Label Analog-Only TV Sets

The Federal Communications Commission started hitting retail stores in their wallets after finding that some initial citations didn't achieve the desired result.

The FCC Tuesday fined a half-dozen retail stores, including RadioShack, almost $100,000 for failing to properly label their TV sets.

RadioShack was fined $16,000 for what the FCC said were willful and repeated violations. The company disputed that characterization.

According to the commission, it cited RadioShack May 31 but issued no fine for selling TVs with only analog tuners without displaying the requisite consumer alert "in close proximity." It issued additional citations June 1 and 11 and began inspections June 12 that found that the labels were still missing in two stores.

As of May 25, according to FCC rules, sets without digital tuners must be clearly marked, either on the set or in close proximity, with the warning that the sets will not receive over-the-air broadcasts after February 2009 unless equipped with converter boxes.

The FCC has been spot-checking compliance through visits to stores and monitoring of Web sites.

Five other less-well-known stores were fined for failure to label their sets properly. All had been given citations over the summer, with the FCC saying its Enforcement Bureau had followed up only to find that all, to greater or lesser extents, had continuing violations.

The biggest fines were levied against Fred Meyer and Ultimate Electronics ($24,000 apiece), followed by $16,000 apiece for RadioShack and Boscov's and $8,000 apiece for Gregg Appliances and Trans World Entertainment.

The FCC warned that if citations didn't work, fines would be forthcoming, but while it has said that it could fine stores $11,000 per day for each day they were not in compliance (up to $97,000), it did not levy any continuing fines.

That is because it would have had to go back to the same model TV set and store,or online entry, where the initial citation was made and track that to levy a continuing violation. Instead, it levied one-time fines of $8,000 per model per store,  which is in line with other labeling violation fines at the FCC and is why the fines are all multiples of 8.

"Yesterday's notice from the FCC regarding our agreement to pay $16,000 for failing to properly display Consumer Alert labels needs to be put in perspective," said RadioShack spokesman Charles Hodges.  

"RadioShack was cited for two separate incidents where the same model analog product, in two separate stores, was determined by the FCC inspectors to not have the appropriate Consumer Alert label.  All other analog products in those stores and in our other stores were found to be properly tagged and displayed.

"Two things need to be considered," he said, "the intent and the scope."

"Regarding intent, RadioShack has numerous initiatives underway to inform customers about the digital transition, including online information, in-store signage and employee education.  RadioShack substantially delivered when the FCC first imposed the labeling requirements in May 2007.  When the FCC first warned the company through citations, RadioShack responded with stepped-up compliance inspections, including random spot checks to ensure store compliance.   We therefore regret and dispute the FCC’s characterization of these two incidences as “willful” and “repeated;” we view them as an unfortunate and unintentional oversight. 

"Considering the scope, we have more exposure than other retailers with a store count of 4,500.  As such, we believe two notices of apparent liability actually supports how successful our educational efforts have been to date.  RadioShack has fully understood the importance of compliance with the FCC’s labeling mandates and with helping to ensure consumers understand what the digital broadcast transition means to them and what products are affected.  Although not perfect, we view the FCC’s finding of only two noncompliant devices in two stores nationwide as indicative of a successful effort on RadioShack’s part."