For Your Information
Federal Trade Commission Finalizes Action Against “Made in USA” Repeat Offender
Resident Home Must Pay $753,000 and Cease Made in USA Fraud
The Federal Trade Commission has finalized an order against Resident Home LLC and owner Ran Reske for allegedly making false, misleading, or unsupported advertising claims that their imported DreamCloud mattresses were made from 100% USA-made materials. Resident Home LLC and Reske will pay $753,000.
In the company’s promotional material, Resident Home LLC and Reske claimed that their DreamCloud mattresses were “proudly made with 100 percent USA-made premium quality materials.” But, according to the complaint, these claims were false or misleading, and violated the FTC Act. The FTC says all DreamCloud mattresses are finished overseas and, in some cases, are wholly imported or use significant imported materials.
Under the terms of the final order, in addition to paying $753,000, Resident Home LLC and Reske are prohibited from making several claims that deceive consumers and harm law-abiding businesses whose sales were siphoned because of this behavior. The order specifically covers unqualified U.S.-origin claims (claims made with no limitations) for any product, unless they can show that:
- the product’s final assembly, final processing, and all significant processing takes place in the United States; and
- all or virtually all ingredients or components of the product are made and sourced in the United States.
The order also governs any qualified Made in USA claims (claims that include explanatory information). For qualified claims, Resident Home LLC and Reske must include a clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing.
The FTC’s Enforcement Policy Statement on U.S. Origin Claims offers guidance on making Made in USA claims. The Made in USA Labeling Rule went into effect on August 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.
The Commission voted 3-2 to approve the complaint and settlement order, with Commissioners Noah Joshua Phillips and Christine S. Wilson voting no. The majority issued a statement, and Commissioners Phillips and Wilson issued a joint dissenting statement.
The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.