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Company Must Drop Deceptive Origin Certification Claims Under FTC Order

Friday, November 21, 2014
Sandler, Travis & Rosenberg Trade Report

The Federal Trade Commission announced Nov. 18 that it has approved a final consent order settling charges that an Ohio company deceived consumers by allowing companies to use its “Made in USA” certification seal without either independently verifying that goods using that seal were actually made in the U.S. or disclosing that the companies had certified themselves. This order carries the force of law with respect to future actions and each violation of it may result in a civil penalty of up to $16,000.

According to the FTC, the company charged $250 to $2,000 for a one-year license to use its certification mark and be listed in a database of “certified” companies that comply with the FTC standard requiring products advertised or labeled as “Made in the USA” to be “all or virtually all” made in the U.S. However, the company falsely advertised that it had independently and objectively evaluated products before certifying them and had no procedures to determine whether marketers complied with the FTC standard. In fact, the FTC alleged, the company had never rejected an application to use its certification mark or terminated a company’s use of the mark and instead has awarded licenses to any company that self-certified its compliance.

Under the consent order, the company is prohibited from (1) claiming that any products or companies meet its certification standard unless either an independent and objective evaluation is conducted to confirm that this standard has been met or the company discloses on its logo and all its promotional materials that companies and products are self-certified; (2) claiming that any product is made in the USA or in any other country unless the claim is true and supported by competent and reliable evidence, or – if the certification mark is used – unless it discloses that companies and products are self-certified; and (3) providing the companies it certifies with the means to deceive consumers. The company must also maintain certain records and make them available to the FTC upon request for five years.

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