When thou makest claims to thy consumers,
Base them in facte, not boast or rumours.
Nowhere is this truer sayeth
Than when thou claim “Made in USA-eth.”
OK – that’s not even close to Ye Olde English, but when a company’s name is Chaucer Accessories, it’s hard for Literature majors not to harken back to their Canterbury Tales days. The FTC just announced a proposed settlement with the company, affiliated entities, and the company president for making allegedly deceptive Made in USA representations. In addition, the case sends an important message about the care advertisers must exercise if they want to make qualified Made in USA claims.
Massachusetts- and New Hampshire-based Chaucer Accessories, Bates Accessories, and Bates Retail Group sell belts, bags, wallets, and shoes to consumers directly, on major product platforms, and through third-party trade customers that resell products under their own private-label brands. The companies’ websites featured banners on every page that said “Made in USA” or “Hand Crafted in the USA.” But according to the FTC, in numerous instances, their shoes, belts, and other items were wholly imported or contained significant imported content. The complaint also alleges the companies made similar misleading Made in USA statements to its third-party trade customers and provided them with labels and promotional materials featuring deceptive U.S.-origin claims.
What’s more, the companies imported belt straps from Taiwan, attached buckles to the straps in the United States, and labeled the finished products as “Made in USA from Global Materials.” According to the complaint, the companies then advertised and sold the belts through their websites, in catalogs, and on third-party platforms with prominent “Made in USA” claims.
In fact, United States Customs and Border Protection determined that those belts weren’t “Made in USA from Global Materials” because attaching a buckle to a strap is a minimal assembly operation that doesn’t change the name, character, or use of an imported belt strap.
The FTC’s three-count complaint charges the respondents with making false or misleading “Made in USA” claims, making false or misleading “Made in USA from Global Materials” claims, and providing its trade customers with the means and instrumentalities to commit deceptive acts or practices. The proposed settlement includes a monetary judgment of $191,481 and requires the respondents to contact certain customers directly about the FTC action.
In the future, the companies and the company president will be prohibited from making unqualified U.S.-origin claims for any product, unless they can show that the product’s final assembly or processing – and all significant processing – takes place in the United States and that all or virtually all ingredients or components are made and sourced here. If they make qualified claims, they must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, components, or processing. For assembly claims, they must ensure that the product is last substantially transformed in the United States, its principal assembly takes place here, and U.S. assembly operations are substantial. Once the proposed settlement is published in the Federal Register, the FTC will accept public comments for 30 days.
The takeaway message for other companies: U.S. origin claims are highly material to many consumers. Don’t run the risk of customers “going medieval” if they learn that a company’s Made in USA claims – qualified or unqualified – are deceptive.
Looking for compliance resources? The Made in USA page features links to the FTC’s Enforcement Policy Statement on U.S. Origin Claims, the Complying with the Made in USA Standard guide for business, and the Made in USA Labeling Rule.