The Federal Trade Commission in the United States has ordered a monetary judgment of $191,481 against a group of Massachusetts- and New Hampshire-based clothing accessories companies, along with their owner, for falsely claiming that certain company products were manufactured in the US.
- The FTC’s proposed order would stop the companies and their owner Thomas Bates from making deceptive claims about products being “Made in USA” and require them to pay a monetary judgment.
- According to the FTC’s complaint, the companies—Chaucer Accessories, Bates Accessories, and Bates Retail Group—have frequently advertised their products as being “Made in USA” or “Hand Crafted in USA” in their marketing and sales materials.
- Additionally, the complaint alleged, the companies sold certain belts labelled as “Made in USA from Global Materials.”
In spite of those claims, the complaint charges that the companies sold certain products that were wholly imported or incorporated significant imported components. - The complaint also charged that belts labelled “Made in USA from Global Materials” consisted of belt straps imported from Taiwan with buckles attached in the US.
The Order: The FTC’s order against the companies and Bates, which the respondents have agreed to, includes a number of requirements about the claims they make:
- Restriction on unqualified claims: the companies and Bates will be prohibited from making unqualified US-origin claims for any product, unless it can show that the product’s final assembly or processing—and all significant processing—takes place in the US, and that all or virtually all ingredients or components of the product are made and sourced in the US.
- Requirement for qualified claims: the companies and Bates are required to include in any qualified Made in USA claims a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing.
- Requirement for assembly claims: the companies and Bates must also ensure, when claiming a product is assembled in the US, that it is last substantially transformed in the US, its principal assembly takes place in the US, and US assembly operations are substantial.
- Monetary judgment: The order includes a monetary judgment of $191,481, which the companies and Bates will be required to surrender to the FTC.
The Legalese: The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides guidance on making non-deceptive “Made in USA” claims.
- The FTC’s Made in USA Labeling Rule went into effect on 13 August, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.
