A notice appeared in the May 19th Federal Register detailing a consent agreement reached with a company called Lions Not Sheep over what the Federal Trade Commission alleged were false and misleading statements regarding the origin of their products.
Watch as George Thompson discusses the nature of the FTC’s complaint and the terms of the settlement with the company.
Transcript of The FTC Can’t Take a Joke
Hello again, this is George Thompson, and today I’d like to discuss the Federal Trade Commission’s Made in USA rules. Now, I know it’s not the most fascinating topic, probably not a great cocktail party conversation. But, it is important to have an understanding of the rules if you plan to claim United States origin for your products. So I’ll give you a brief review.
What prompted this discussion is a notice in the May 19th Federal Register. The Federal Trade Commission reached a consent agreement with a company called Lions Not Sheep. The Commission claimed the company made false and misleading statements regarding the origin of apparel and haberdashery it sold.
Lions Not Sheep claimed its hats and clothing were made in the U.S., when in fact they were imported or made with imported content. In fact, it removed the origin tags from imported clothing, and inserted replacements claiming USA origin. It also marketed and advertised them as such. The Commission filed a complaint, alleging these claims were unfair or deceptive acts or practices, and also that removal of the origin tags from clothing violated the Textile Fiber Products Identification Act.
Why did the FTC consider the made in USA claims to be false? The agency has a longstanding position that such claims are permitted only if all or virtually all of its contents is of U.S. origin and the product is actually made here. In Lions Not Sheep’s case, either the entire product was imported or its materials were. For some items, the only work done in the United States was printing and embroidering.
So, based on the FTC allegation, this seems like a pretty clear case. Lions Not Sheep has apparently agreed to settle by promising to stop making these false origin claims, paying a monetary judgment of $211,000, and adopting a compliance program. Note also that the FTC complaint was issued against the company’s owner in his personal capacity, as well as the company itself.
Now, the Lions Not Sheep case may be particularly egregious, but it does indicate the Federal Trade Commission is serious in general about pursuing cases against false origin claims. Any companies asserting their products have U.S. origin should be sure they comply with the FTC criteria.
That’s it for today.
Thompson & Associates, PLLC provides representation in all aspects of customs laws and regulations, specializing in export and import regulations and international business counseling. We can be reached at 202-772-2039 or online.
