The Federal Trade Commission announcement that it has finalized its settlement with Electrowarmth Products and the company’s owner over accusations that the company made false claims of American origin regarding its heated mattress pads. As a member of regulationthe defendants accepted a judgment for $815,809 (which was stayed due to their inability to pay).
The FTC alleged that while the company originally manufactured its mattress toppers in the United States, several years ago the company moved production to China. Despite this, the FTC alleged that the company continued to promote its products as “Made in USA”, “Made in the USA since 1939”, and “made-in-America products”. In its complaint, the FTC accused the defendants of violating both the FTC law and the Textiles Act.
When the settlement was first announced, Samuel Levine, director of the FTC’s Consumer Protection Bureau, said, “Hard-working American truckers shouldn’t have to maneuver around marketers who exploit their patriotism. can also harm competitors who tell the truth about the origin of the product.”
According to the FTC U.S. Origin Claims Enforcement Policy Statement, to unreservedly state that a product is made in the United States, the marketer must be able to prove that the product was “wholly or substantially all” made here. (This principle was also recently codified in the FTC’s Made in USA Labeling Rule.)
One of the common misconceptions about these principles is that they only cover claims that a product was explicitly “made” here. The FTC Policy Statement and Rule apply not only to claims that a product was “manufactured” here, but to all claims that a product is of US origin, including, for example, claims such as “made”, “constructed”, “produced”, “created” and “made”. (The FTC uses similar language in its settlement agreement with the defendants here as well.)
How much does the FTC care about “Made in USA” claims? To give you an idea, in the FTC Business Blog last week, FTC attorney Lesley Fair wrote a Halloween-themed post. Publish about the FTC’s “Top 10 Consumer Protection Horror Films ‘Nightmare on Main Street'” – and claims of American origin made the top 10 with “It Came From Outer Space”. She wrote, “If it’s from outer space, don’t mislabel it as ‘Made in USA’. ‘Made in USA’ claims are very important to many consumers. Marketers and manufacturers who promote their products as “Made in the USA” must meet the long-standing “most or all” standard – or must clearly and appropriately qualify their representations The FTC’s Made in USA labeling rule, in effective since August 2021, could mean stiff civil penalties for companies that make misleading claims.”
“Hard-working American truckers shouldn’t have to bypass traders who exploit their patriotism”