FTC Finds Companies Deceived Consumers by Using “Made in USA” Label, Does Nothing

FTC Finds Companies Deceived Consumers by Using “Made in USA” Label, Does Nothing

It’s time for the agency to start imposing tougher penalties.

Oh, we’re all fired up over this one.

Earlier this year, the Federal Trade Commission (FTC) concluded that three companies deceived consumers by placing a “Made in USA” label on their products even though those goods were manufactured overseas. Here’s FTC commissioner Rohit Chopra with the details:

  • Sandpiper/PiperGear USA made military-themed backpacks and other gear clearly designed to capitalize on American patriotism, and placed “American Made” labels onto its products. It even sold “thousands of backpacks on American military bases overseas.” The vast majority of Sandpiper’s products are actually made in China or Mexico.
  • Nectar Sleep is a direct-to-consumer online mattress firm that “falsely represented to consumers that its mattresses were assembled in the U.S.,” perhaps to gain an advantage in the crowded mattress market. But Nectar’s mattresses are actually made in China.
  • Patriot Puck manufactured hockey pucks and positioned itself as “the all-American alternative to imported pucks.” Patriot Pucks were draped in the American flag, and the company claimed its pucks were “100% American Made!” All of the company’s pucks are imported from China.

In his statement, Chopra called this conduct “brazen and deceitful,” noting that each company “harmed both consumers and honest competitors.”

Chopra is right. The “Made in USA” label is so valuable because it stands for something. Public opinion polls almost always find that consumers perceive American-made items as being of higher quality than those made abroad in places like China.

And American manufacturers work hard and make sacrifices to keep their production in the United States. In doing so, these companies create good-paying jobs and are often the lifeblood of their local communities.

Americans recognize this, and vast majorities of them say that they would rather buy an American-made product versus a similar item made overseas. That “Made in USA” label carries a lot of clout and can be a big selling point.

Which is why it is so upsetting to see companies like the three above openly deceiving consumers — and why it’s so frustrating to learn that all three ended up facing little-to-no consequences for their actions.

As Chopra explains:

“Most FTC resolutions of Made-in-USA violations have resulted in voluntary compliance measures or cease-and-desist orders. Indeed, none of the three settlements approved today includes monetary relief, notice to consumers, or any admission of wrongdoing.”

This is incredible. All these companies received for knowingly deceiving consumers was a slap on the wrist. They faced no actual consequences for their actions. They didn’t even have to publicly own up to it!

Chopra is calling for the FTC to “do more to protect the authenticity of Made-in-USA claims,” including by seeking monetary relief, providing notice to consumers of deceptions like the ones outlined above and other tailored actions.

“Nectar Sleep, Sandpiper, and Patriot Puck clearly violated the law, allowing them to enrich themselves and harm their customers and competitors,” Chopra writes. “Especially given widespread interest in buying American products, we should do more to protect the authenticity of Made-in-USA claims.”

It’s the job of the FTC to monitor cases like these — and make sure cheaters do not get away with deception. We hope you will join us in calling on the FTC to impose tougher rules and actual penalties on companies that cheat the system.

Who runs the Federal Trade Commission? The Commission is headed by five Commissioners, nominated by the President and confirmed by the Senate, each serving a seven-year term. No more than three Commissioners can be of the same political party. The President chooses one Commissioner to act as Chairman.

This means that 3 Commissioners are Republicans. All five were appointed in 2018. So, you would think that the President who makes waves about having things “Made in USA”  would have their committee punish those who falsely profit using the MADE IN USA logo. But no. Trump truly doesn’t care about Made in the USA, he never did until he used it as a campaign idea in January, 2016. Trump’s companies still makes all his clothes in China. What did Trump do to that nasty old NAFTA? He re-named it without any major changes. That way US companies can still off-shore their jobs to Mexico.

In conclusion, there will be no prosecution by the Feds, there will not even be a Twitter statement from the #illegitimatePresident about misusing the Made in USA label. What can you expect from somebody that continues to make money illegally?

This article is from the Alliance for American Manufacturing blog.

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October 2018


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