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False Origin Claims for Mattresses Resolved by FTC

Friday, March 16, 2018
Sandler, Travis & Rosenberg Trade Report

According to the Federal Trade Commission, a U.S. company has agreed to stop making false claims that its mattresses are “designed and assembled in USA” when in fact they are wholly imported from China, with no assembly taking place in the U.S.

Under the terms of a proposed FTC order, the company is prohibited from making unqualified U.S.-origin claims unless it can show that the products’ final assembly or processing, and all significant processing, take place in the U.S. and that all or virtually all components of the product are made and sourced in the U.S. In addition, any qualified U.S.-origin claim must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing. To claim that a product is assembled in the U.S., the FTC states, the company must ensure that the product is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.

The proposed order also prohibits the company, its officers, and any other company representatives from making untrue, misleading, or unsubstantiated country of origin claims in their marketing materials about any product or service. Public comments on this order are due by April 12.

When the FTC issues a consent order on a final basis, it carries the force of law with respect to future actions and each violation may result in a civil penalty of up to $40,654.

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