The FTC took action last week against a group of New England-based clothing accessories companies for making false claims that certain of its products were “Made in USA.”
The FTC’s complaint alleges that Chaucer Accessories, Bates Accessories, and Bates Retail Group have deceptively advertised that their products are “Made in USA” or “Hand Crafted in USA” despite selling certain products that are either wholly imported or containing imported components. In addition, the companies sold belts with “Made in USA from Global Materials” labels despite consisting of belt straps imported from Taiwan with buckles allegedly attached in the U.S. The complaint also takes action against Thomas Bates, the president and owner of the companies, individually.
The consent agreement requires a monetary payment of $191,481. In addition, the FTC has prohibited the companies from making any representation—expressly or by implication—that a product is Made in the United States unless either: (a) the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and virtually all ingredients or components are made or sourced in the United States; or (b) there is a clear and conspicuous qualification placed adjacent to the representation and accurately conveys the extent to which the product contains any foreign parts, ingredients or components, or processing; or (c) for products assembled in the United States, the product is last substantially transformed in the United States, the principal assembly takes place in the United States, and the United States assembly operations are substantial.
This latest complaint comes as no surprise. The FTC has been vigorously enforcing false and deceptive “Made in USA” claims, as we’ve covered here, here, and here. The FTC has repeatedly held that misleading “Made in USA” claims harm consumers and hinder competition. Companies would be well-advised to consult with the FTC’s Made in USA Labeling Rule and the agency’s Made in USA Guidance to ensure FTC compliance before making any such claims themselves.