Major US retailers Kohl's and Walmart have been fined a total of $5.5 million for falsely marketing dozens of rayon textile products as bamboo.
The charges: The US Federal Trade Commission used its Penalty Offense Authority on 8 April and charged the two companies with making deceptive environmental claims, touting that the “bamboo” textiles were made using ecofriendly processes, while in reality converting bamboo into rayon requires the use of toxic chemicals and results in hazardous pollutants.
The penalties: The FTC has asked the court to order Kohl’s and Walmart to stop making deceptive green claims or using other misleading advertising, and pay penalties of $2.5 million and $3 million, respectively, by far the largest penalties in this area. The complaints and proposed orders were filed by the US Department of Justice on the FTC’s behalf.
What the companies did: Since at least January 2015, Kohl’s and Walmart each marketed at least two dozen items as made of bamboo in both product titles and descriptions. In addition, they marketed some of the “bamboo-derived” products as providing general environment benefits, such as being produced “free of harmful chemicals, using clean, non-toxic materials.”
The allegations: Kohl’s and Walmart’s supposed “bamboo” textiles are actually made of rayon derived from bamboo, which was not disclosed to consumers, in violation of the FTC Act and the Textile Act and Rules. Further, the complaints allege the claimed environmental benefits of the products are false and misleading because the rayon manufacturing process uses toxic chemicals and results in the emission of hazardous pollutants.
The order: The proposed orders settling the FTC’s complaints against Kohl’s and Walmart prohibit the companies from conduct alleged in the complaint. The companies must:
- Shut down bogus bamboo marketing claims: Stop claiming that a textile product is made of bamboo or bamboo fiber, unless they can substantiate it;
- Stop making unsubstantiated green marketing claims: For products made of bamboo or bamboo fiber, stop claiming that it is produced free of harmful chemicals, using non-toxic materials, or in a way that is safe for the environment or non-polluting, or has any other environmental benefits because it is derived from bamboo, unless they can substantiate it;
- Stop Textile Rule violations: Stop violating the FTC’s Textile Act and Rules by deceptively advertising textile contents; and
- Pay $5.5 million in penalties: Kohl’s and Walmart must pay civil penalties of $2.5 million and $3 million, respectively, under the FTC’s Penalty Offense Authority.