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FTC Consent Agreement Requires Company to Drop Deceptive Origin Certification Claims

Tuesday, July 29, 2014
Sandler, Travis & Rosenberg Trade Report

The Federal Trade Commission reports that an Ohio company that provides a “Made in USA” certification seal to marketers has agreed to halt deceptive claims about such certifications. Comments on the proposed consent agreement are due no later than Aug. 22.

According to an FTC press release, 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 has 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 proposed consent order, the company is prohibited from (1) claiming that any products or companies meet its certification standard unless it either conducts an independent and objective evaluation or 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.

A final consent order will carry the force of law with respect to future actions and each violation of such an order may result in a civil penalty of up to $16,000.

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