Vermont Hosiery Mill Agrees To Settle Charges It Sold Misbranded Socks to National Retail Chain

Cabot Hosiery Mills, Inc. has agreed to settle Federal Trade Commission charges that the company violated the FTC's Textile Fiber Products Identification Act (Textile Act) when it sold to national retailer The Gap, Inc. a line of socks -- the "Granite Ragg" sock -- that were mislabeled as to their fiber content. According to the FTC, labels on the Granite Ragg socks indicated that the socks contained more cotton and LYCRA® spandex fiber than they actually did. Further, the labels indicated that the socks contained less polyester, acrylic, and nylon fibers than they actually did. In addition, the FTC said that the company furnished false guaranties stating that its socks were not misbranded under the Textile Act by misrepresenting that it had on file with the FTC a continuing guaranty that their textile products were properly labeled. Under the proposed settlement of these charges, the company would be prohibited from violating the Textile Act in the future and would pay a civil penalty in the amount of $10,000.

Under the Textile Act, a textile fiber product is misbranded if it is falsely or deceptively stamped, tagged, labeled, invoiced or otherwise identified as to the amount of constituent fibers in the product. According to the FTC's complaint detailing the charges, the Northfield, Vermont-based company misbranded the "Granite Ragg" socks they sold to The Gap, Inc. by labeling them with the following fiber content: 70 percent cotton, 12 percent nylon, 10 percent polyester; 5 percent acrylic, and 3 percent LYCRA® spandex. According to the complaint, the socks, in fact, contained an average of approximately 53 percent cotton, 18 percent nylon, 18 percent acrylic, 11 percent polyester, and .9 percent LYCRA® spandex. The complaint also charged that the company failed to attach to its socks a stamp, tag, or label, showing in words and figures plainly legible the true percentage of each fiber present, by its true generic name, where the weight of such fiber was 5 percent or more of the total weight of the product.

In addition, the FTC charged that the company further violated the Textile Act by:

• furnishing false guaranties that textile fiber products were not misbranded or falsely or deceptively invoiced or advertised by misrepresenting in writing that they had a continuing guaranty on file with the FTC; and

• failing, neglecting, or refusing to maintain proper records showing the fiber content of textile fiber products.

The proposed settlement to these charges would prohibit the company from violating any provisions of the Textile Act in the future and would require the company to maintain and make available to the FTC business records demonstrating their compliance with the terms of the settlement. The proposed settlement permits Cabot Hosiery Mills to pay the $10,000 civil penalty in two installments.

The Department of Justice filed the complaint and proposed consent decree today, in the U.S.

District Court for the District of Vermont, in Burlington, on behalf of the FTC. The consent decree is subject to approval by the court. The Commission vote to refer the complaint and proposed settlement to the Department of Justice for filing was 5-0.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.

Copies of the complaint and proposed consent decree are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov (no period)

(Civil Action No: 2-97 CV-98)
(FTC File No. 952 3419)