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$220,000 Penalty for Misleading “Made in USA” Claims

Thursday, October 20, 2016
Sandler, Travis & Rosenberg Trade Report

The Federal Trade Commission announced Oct. 19 that a specialty chemical company has agreed to pay $220,000 to resolve charges that it deceived consumers by making “Made in USA” or “Proudly Made in USA” claims for certain glue products. According to an FTC press release, these claims implied that the products were all, or virtually all, made in the U.S. when approximately 55 percent of the costs of the chemical inputs were attributable to imported chemicals that are essential to the glues’ function. The FTC also alleged that the company assisted others in deceiving consumers by distributing its “Made in USA” marketing materials to private-label sellers and third-party websites and storefronts.

The FTC states that the stipulated final order prohibits the company from making unqualified “Made in USA” claims for any product unless it can show that the product’s final assembly or processing, and all significant processing, takes place in the U.S. and that all or virtually all ingredients or components of the product are made and sourced in the U.S. The order permits the company to make qualified “Made in USA” claims as long as they include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing. The company also is prohibited from providing others with the means to make deceptive “Made in USA” claims about its products.

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