The FTC remains committed to enforcing the Made in USA Labelling Rule. Credit: Shutterstock.

The Federal Trade Commission (FTC) has taken action against a group of clothing accessories companies based in Massachusetts and New Hampshire, US along with their owner, Thomas Bates, for misleading consumers with false claims about the products being Made in the USA.

“‘Made in USA’ means what it says,” explained Samuel Levine, director of the FTC’s Bureau of Consumer Protection.

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He added: “Falsely labelling products as ‘Made in USA’ hurts consumers and competition, and the FTC will continue to aggressively enforce the law to stop deceptive claims and hold violators accountable.”

The FTC has remained committed to enforcing the Made in USA Labelling Rule since it came into effect on 13 August 2021, which means companies violating the rule after that date may be subject to penalties.

According to the FTC’s complaint, the clothing accessories companies — Chaucer Accessories, Bates Accessories, and Bates Retail Group — frequently promoted their products as being “Made in USA” or “Hand Crafted in USA” in their marketing and sales materials. The complaint also alleges that certain belts sold by these companies were labelled as “Made in USA from Global Materials.”

However, the complaint explains the companies sold products that were either entirely imported or contained significant imported components. Additionally, belts labelled as “Made in USA from Global Materials” were found to have belt straps imported from Taiwan, with buckles attached in the US.

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The administrative complaint and consent agreement was approved unanimously with a 3-0 vote from the Commission. Julia Solomon Ensor, a lead staff attorney in the Bureau of Consumer Protection, handled the case.

The FTC’s order, which the companies and Bates have agreed to follow, includes several requirements for any future claims:

  1. Restriction on unqualified claims: The companies and Bates are prohibited from making unqualified “Made in USA” claims for any product unless they can prove the final assembly and significant processing occurred in the US and that nearly all ingredients or components were made and sourced within the country.
  2. Requirement for qualified claims: Qualified “Made in USA” claims must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing.
  3. Requirement for assembly claims: If claiming that a product is assembled in the US, the companies and Bates must ensure that it undergoes a substantial transformation within the country during the assembly process, with principal assembly operations taking place in the country.
  4. Monetary judgment: The order includes a monetary judgment of $191,481, which the companies and Bates must pay to the FTC.