Background

The Federal Trade Commission has voted to accept a consent agreement under which a U.S. company and its owner will pay civil penalties of over $200,000 to settle a complaint that they falsely claimed that their imported apparel is made in the U.S.

According to the FTC, the company’s “Made in USA” claims online and on product labels included “Made in the USA,” “Made in America,” “Are your products USA Made?” “100% AMERICAN MADE,” and “BEST DAMN AMERICAN MADE GEAR ON THE PLANET.” However, in most cases the products advertised using these claims consist of wholly imported shirts and hats, with limited finishing work performed in the U.S. The FTC alleged that the company removed tags disclosing that the goods were made in a foreign country and replaced them within printing that said “Made in USA.”

Under the consent order the company and its owner must (1) pay a judgment of $211,335, (2) stop claiming that products are made in the U.S. unless they can show that the final assembly or processing (and all significant processing) takes place in the U.S. and all or virtually all ingredients or components are made and sourced in the U.S., (3) include with any qualified “Made in USA” claim a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing, (4) ensure that for products claimed to be assembled in the U.S. the goods are last substantially transformed in the U.S., their principal assembly takes place in the U.S., and the U.S. assembly operations are substantial, and (5) submit compliance reports.

For more information on “Made in USA” labeling requirements, please contact attorney Elise Shibles at (415) 490-1403 or via email.

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