The phrase is only nine letters long, but for many consumers, it makes the difference between a product in the shopping basket and one left on the shelf. It’s “Made in USA” and the FTC just announced a settlement of its lawsuit against Chemence, Inc., for misleading Made in USA claims. If your company makes similar representations, is it time for a compliance check?
Georgia-based Chemence manufactures Kwik Fix, Hammer Tite, and Krylex Glues – fast-acting glues made with cyanoacrylate. The FTC sued Chemence in February 2016, alleging that the company’s “Made in USA” or “proudly made in the U.S.A.” claims for its cyanoacrylate glues suggested that the products were all, or virtually all, made in the United States.
According to the FTC, when you look at the chemicals, including those essential to the glues’ function, 55% of the cost of the substances came from imports – rendering the company’s Made in USA claims misleading. The FTC also alleged that Chemence assisted others in deceiving consumers by distributing marketing materials to private-label sellers and third-party sites and storefronts that included misleading Made in USA claims.
The settlement, which includes a $220,000 financial remedy, requires changes in how Chemence advertises its products. The order prohibits the company from making unqualified Made in USA claims for any product unless it can show that final assembly or processing – and all significant processing – take place in the United States, and that all or virtually all ingredients or components are made and sourced in the U.S. The order also prohibits Chemence from providing others with the means to make deceptive Made in USA claims about its products.
What about qualified claims? Under the order, which was filed in federal court in Cleveland, Chemence may make qualified Made in USA claims only if those representations include clear and conspicuous disclosures about the extent to which the products contain foreign parts, ingredients, or processing.
Does your company make Made in USA claims on products or packaging, in ads, on your website, or in marketing materials? Read the FTC’s Enforcement Policy Statement on U.S. Origin Claims for compliance guidance.