The FTC has the ability to impose fines against Made in USA fraud, but has never done so… yet…
It’s truly dismaying to see companies exploit the value and integrity of the “Made in USA” label in their marketing all while importing their products from countries like China. But, even more upsetting, is that the Federal Trade Commission (FTC) has been letting these companies off the hook with little more than a slap on the wrist for decades.
Four companies, including Patriot Pucks and Sand Piper, came under scrutiny for their false “Made in USA” labeling this year, but they join a horde of others that have abused the label in the past.
We’ve had more than enough of this deception and complacency, and so has FTC Commissioner Rohit Chopra.
Following a FTC vote Tuesday to offer Patriot Pucks and Sand Piper no-money, no-fault settlements despite the fact that these companies were found to have violated federal law regarding labeling, Chopra issued a statement outlining how the FTC can actually defend the “Made in USA” label.
We lost a vote today at the FTC. After catching companies lying about their products being Made in USA, the agency voted to essentially let them off scot-free. Tough loss for honest companies and their employees who make products here at home.
— Rohit Chopra (@chopraftc) April 17, 2019
As Chopra writes, American manufacturers often make sacrifices in order to produce domestically and lose the advantages of “Made in USA” marketing when importers claim the label.
“Almost 8 in 10 American consumers say they would rather buy an America-made product than an imported one,” a 2015 Consumer Reports survey found. The survey also found that, though products manufactured domestically may come with a higher price tag, consumers are willing to foot a bigger bill in order to buy these goods – something Sand Piper and Patriot Puck both exploited in marketing their products imported from China and Mexico as “Made in USA.”
In the past, the FTC has deemed a warning to cease falsely advertising products as made in America as sufficient punishment. But, Chopra urges the FTC to “activate a legal switch to ‘turn on’ civil penalties for the first offense.” From thereon out, each violation can invoke $42,530 in fines.
To activate this civil penalty authority and thus more easily impose fines for violators, Chopra recommends that the FTC codify its “Made in USA” labeling standard, which requires that “all or virtually all” of a product’s parts and processing are of U.S.-origin. Not only would this further strengthen the FTC’s ability to impose fines, but it would also offer further clarity for companies who wish to use the label legitimately.
Defending the “Made in USA” label and the American manufacturers who rely on it feels like common sense to us, to say the least. If the FTC truly wants to deter further fraud, violators must be held to account. Join us in calling on the FTC to impose tougher rules and actual penalties on companies that attempt to swindle consumers with false “Made in USA” marketing.