There are lots of nifty phone accessories, bottle holders, tow straps, pet items, and lanyards out there. So a label that says the product is Made in the USA may help make the decision for some consumers. When it bears the American flag and says “TRULY MADE IN THE USA,” that just might seal the deal. But according to an FTC lawsuit, a lot of the “Made in the USA” merchandise touted by Logan, Utah-based E.K. Ekcessories wasn’t really made in the USA – turning the company’s claims from a Yankee Doodle Do to a Yankee Doodle Don't.
E.K. Ekcessories sells a variety of outdoor equipment through popular retailers and on its own site. In addition to the labels, the company touted its products’ U.S. pedigree with statements like “For 28 years E.K. Ekcessories has been producing superior quality made accessories in our 60,000 sq. ft. facility in Logan, Utah,” and “Our source of pride and satisfaction abounds from a true ‘Made in USA’ product.”
To say an item is made in the USA, all or virtually all of it has to be U.S.-made. In other words, all significant parts and processing must be of U.S. origin, and the product should contain no – or negligible – foreign content. That’s the standard explained in the FTC’s 1997 Enforcement Policy Statement on U.S. Origin Claims. But according to the complaint, in many cases, E.K. Ekcessories made “Made in USA” representations that were flat-out false. In other instances, the FTC says the company slapped a label on a product without a reasonable basis for making the claim. Both courses of conduct violate the FTC Act.
Under the proposed order, the company can’t say a product is made in the USA unless all or virtually all of it really is made in the United States. The order also bans other misleading claims about products’ country of origin.
Given that other companies are selling the deceptively labeled merchandise, E.K. Ekcessories has to contact all distributors who bought or received products between January 1, 2010 and May 1, 2013, explaining the FTC’s lawsuit. The retailers will be asked to pull marketing materials that say all E.K. Ekcessories stuff is U.S.-made or that describe a specific list of products as made in the United States, of U.S.-origin, or “Truly Made in the USA.” For certain lines of products, they’ll get stickers to cover the inaccurate claims.
You can file an online comment about the proposed settlement by November 21, 2013.
The message for marketers? First, it’s a good time to brush up on how to comply with Made in USA standards. The Business Center has a dedicated Made in USA page to make that easier for you. Second, given just how important many consumers take a Made in USA claim, companies that make that statement falsely or without a reasonable basis are risking law enforcement action. Truly.