Consumers love to “buy American.” It stands to reason, then, that consumer products companies love to market their products as “Made in America.” Recent settlements between the Federal Trade Commission (FTC) and three different companies illustrate the danger of advertising a product as American-made without proof that the product is, in fact, manufactured in America.
FTC, which monitors the marketplace for deceptive and unfair advertising claims, makes clear that “a product advertised as Made in USA be ‘all or virtually all’ made in the U.S.” See the FTC’s guidance on Complying with Made in USA Standard. This requires a manufacturer or advertiser to have “competent and reliable evidence to back up the claim that its product” meets that standard. Id. Qualified Made in USA claims are also permissible, provided of course that they are truthful and substantiated. FTC’s Enforcement Policy Statement on U.S. Origin Claims sets out the parameters for qualified claims.
Three companies selling very different products – mattresses, hockey pucks, and backpacks & travel accessories – all found themselves in FTC’s crosshairs over Made in USA claims. First, Nectar Brand, LLC advertised mattresses as being “Designed and Assembled in USA.” In fact, however, the mattresses were imported from China. Nectar Brand settled with FTC in a Consent Decree prohibiting, among other things, unqualified Made in USA claims without proof that the products’ final processing as well as significant portions of the processing all occurred in America.
Similarly, Underground Sports, Inc. d/b/a Patriot Puck caught FTC’s attention with ads like these:
The actual source for the hockey pucks? China.
Even a Made in USA claim found in a hashtag caught FTC’s attention when it investigated claims made by Sandpiper of California, Inc.:
Contrary to the advertising, 95% of Sandpiper’s products are imported as finished goods.
Like Nectar Brands, both Patriot Puck and Sandpiper have entered into settlement agreements prohibiting these unqualified Made in USA claims. While the settlements appear logical given the egregious facts, it is worth taking note of the strict scrutiny FTC gives to both qualified and unqualified Made in USA claims. Manufacturers and advertisers should make sure they understand the rules and have substantiation for any country-of-origin claims they make.