Four More Companies Flagged by FTC Over 'Made in USA' Claims
President Donald Trump wants more products labeled "Made in USA." But companies beware: The Federal Trade Commission in recent weeks revved up enforcement of allegedly deceptive "Made in USA" marketing, resolving accusations that four companies' advertising violated the agency's requirement that products be "all or virtually all" manufactured in the United States to live up to domestic origin claims. So far this year, 15 companies have resolved the FTC's allegations through the agency's so-called "closing letters."
August 22, 2017 at 02:04 PM
4 minute read
At a fiery rally Tuesday that resembled his campaign events, President Donald Trump reiterated his call to bring manufacturing back to the United States, saying he wants “more products stamped with the letters 'Made in the USA.'”
But that labeling can land companies in trouble with federal regulators over deceptive marketing claims.
In recent weeks, the Federal Trade Commission has revved up enforcement of allegedly deceptive “Made in USA” marketing, resolving accusations that four companies' advertising violated the agency's requirement that products be “all or virtually all” manufactured in the United States to live up to domestic origin claims.
The agency issued each of the four companies a so-called “closing letter”—an administrative tool in which staff will decline to recommend a formal enforcement action on the showing that a company has agreed to make changes to marketing and labeling. With the recent spurt of activity, the FTC ended a four-month dry spell. It had last issued a closing letter over a “Made in USA” claim in April to Innovative Office Products over its marketing of standing desks.
The latest closing letter was received by Excel Industries, a Kansas-based company that runs the Hustler Turf Equipment and BigDog Mower Co. lawn mower brands. In the letter, FTC attorney Julia Ensor noted that while Excel Industries assembles the mowers and “performs some manufacturing functions in the United States, certain mowers incorporate significant imported content.”
The FTC decided not to pursue the investigation further, she wrote, in light of Excel Industries' plan to phase out “Made in USA” decals, update its marketing materials and revise its claims to say “Designed and assembled in USA” and “Made in USA of US and Global Parts.”
The company's plan also included an increasingly more common step in the annals of “Made in USA” compliance: deleting old social media posts. Similar letters have in general noted that companies agreed to an “updating,” “revising” or “modifying” of their posts on Instagram, Facebook and other social media sites.
An FTC spokeswoman declined to comment on the Excel Industries letter, saying the agency can't reveal the details of confidential investigations. A spokeswoman for the company declined to comment.
Earlier this month, the FTC sent closing letters to three companies over their “Made in USA” claims. Hoshizaki America Inc., a Georgia-based manufacturer of commercial ice machines, agreed to a “comprehensive remedial action plan” that included “updating YouTube videos,” according to an Aug. 7 letter to the company's lawyer, Bryan Cave senior counsel Daniel Schwartz in Washington. Schwartz could not immediately be reached for comment.
On Aug. 11, the FTC sent a closing letter to Florida-based Thales e-Security over “Made in USA” claims on some of the company's data security products. Among other steps, the company's plan included “reviewing catalogues, signage, packaging and social media content to ensure the accuracy of claims for affected products,” according to a letter the FTC sent to James Kearney, a partner in the Tysons Corner, Virginia, office of Womble Carlyle Sandridge & Rice.
And last week, the agency sent a closing letter to Georgia-based Harimatec Inc. over product samples the company sent to a potential customer. According to the FTC's letter, the company said it had “inadvertently” claimed that the samples were “Made in USA” and notified the potential customer after discovering the error.
Harimatec's lawyer, FisherBroyles partner Chris Pey in New York, declined to comment on the letter.
With the recent flurry of activity, the FTC has now sent 15 closing letters this year over “Made in USA” claims for everything from standing desks to coffee makers. That total puts the FTC on pace to fall short of the 29 letters it issued last year. In 2015, the FTC sent 28 closing letters concerning “Made in the USA” claims.
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