The Consumer Product Safety Commission and the Federal Trade Commission are both taking on the home insulation industry.

The CPSC announced this week that it will be studying the flammability hazard of cellulose home insulation, while the FTC is investigating claims by consumers that home insulation firms are misleading consumers with deceptive advertising.

The CPSC, acting on a petition from the District Attorney's office in Denver - which has reported several fires in that area traced to inadequately treated cellulose insulation - this week ordered a probe into the need for safety regulations in the insulation industry.

Cellulose insulation is made of ground up paper, which the CPSC says is "inherently flammable and requires the addition of chemicals to achieve flame retardancy."

The Denver complaint said that the fires there were caused by the cellulose being exposed to electrical connections in attics.

The Consumer Product Safety Commission said it will also study other alleged hazards linked with home insulation, including the risk of cancer from inhaling and ingesting particles from fiberous glass insulation, the potential fire hazards of fiberous glass and plastic foam/resin products, and the risk of irritation and poisoning from plastic foam/resin products.

The cellulose industry maintains that alleged fire problems result only from the work of a few "fly-by-night" operators who install the material. The cellulose itself, when properly treated is safe, the industry maintains.

Most home insulation today is fiber-glass, not cellulose. But according to the Consumer Product Safety Commission, there is a danger that the cheaper cellulose will find more acceptance as the government steps up its campaign to encourage homeowners to conserve energy - especially if energy-savings-related tax rebates are offered in the near future.

The commission expects to have a draft of mandatory regulations early next year.