The Federal Trade Commission today announced it has settled charges brought through an administrative complaint against FanBuzz, Inc. (FanBuzz), a corporation with headquarters in Minnetonka, Minnesota, alleging violations of the Textile Fiber Products Identification Act (15 U.S.C. Sec. 70b(i)) and the FTC's Textile Rules (16 C.F.R. Part 303). FanBuzz, which has been in business for four years and had revenues in 2000 of approximately $10 million, is an online retail store selling specialty sports apparel to consumers on behalf of numerous clients, including university and professional athletic teams, leagues, and conferences.
According to the Commission, FanBuzz violated the Rules by failing to make country-of-origin disclosures as required for textile products sold through mail order catalogs or other mail order promotional materials. In 1998, the Commission amended the definition of "mail order catalog" to include those disseminated electronically over the Internet. Under the consent agreement settling the charges, FanBuzz would be prohibited from violating the Rules in the future, and would be required to comply with other provisions to ensure its compliance for the 20-year term of the order.
"This action should send a strong message about textile retailers' need to comply with country-of-origin disclosure requirements for the products they sell online," said Howard Beales, Director of the FTC's Bureau of Consumer Protection.
In early 1999, six months after the Internet-related amendments to the Rules were announced, the Commission conducted an Internet "surf" to determine whether on-line sellers of textile products were complying with the country-of-origin disclosure requirements. As a result of that surf, the FTC brought and settled charges against seven major U.S. retailers, including Wal-Mart Stores, Inc; Burlington Coat Factory Warehouse Corporation; Bugle Boy Industries, Inc.; Woolrich, Inc.; and Abercrombie & Fitch, Inc. As in today's action, each of the companies was prohibited from future violations of the Rules.
According to the Commission's complaint in this matter, FanBuzz violated the FTC's Textile Rules by failing to disclose whether its products are made in the United States, are imported, or both. Under the terms of the consent agreement reached with the Commission, FanBuzz would be prohibited from future violations of the Textile Act and FTC rules implementing the statute.
The Commission vote to file the administrative complaint and approve the consent agreement settling its allegations was 5-0. It has been placed on the public record for 30 days, until November 11, 2001, after which the Commission will decide whether to make it final. Comments may be submitted to: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580.
NOTE: The Commission files a complaint when it has "reason to believe" that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendant has actually violated the law. The consent agreement referenced in this release is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the administrative complaint, consent agreement, and an analysis to aid public comment are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
(FTC File No. 012-3151)