Senators Urge Fines Against Nectar Sleep, Sandpiper/PiperGear USA, and Patriot Puck for Fraudulently Affixing Made in the USA Labels
U.S. Senators Sherrod Brown (OH), Chris Murphy (CT), and Tammy Baldwin (WI) sent a memo to the FTC on October the 15th urging the Federal Trade Commission (FTC) to fully enforce its Made in the USA” labeling standards.
Country of Origin Labeling
Almost every major country has requirements that must be met to use the “Made in ____” label for that country. Think about it like requirements for truth in advertising. In the United States of America, it’s up to the FTC to write, maintain, and enforce the standards for using the Made in USA label. Click here for more details on the differences between Made in USA and Assembled in USA.
Enforcement and Request for More Penalties
We’re huge proponents of strict enforcement of Made in USA. Sometimes there is a simple misunderstanding that happens with new brands and smaller companies, which is where grace comes in. However, we’ve repeatedly seen many brands both 1) create labels and wording that may be legally okay but clearly mislead consumers and 2) several brands apply the Made in USA label when they know the product was entirely made in a foreign country.
In their letter, the Senators bring up three companies that specifically affixed “Made in America” labels to foreign-made products. This not only misleads consumers but it also puts American businesses at a disadvantage. We agree with the call for the FTC to consider monetary penalties and public admission of guild for any company that imports products from countries like China and knowingly commits these label violations.
A copy of their letter to the FTC appears below:
Dear Chairman Simons:
We write to urge the Commission to fully enforce “Made in the USA” labeling standards and to express our concerns with no-fault, no-money settlements for “Made in the USA” labeling violations. When a product says “Made in the USA,” consumers expect that the product was made domestically. Failing to enforce “Made in the USA” standards misleads consumers and disadvantages domestic producers, and we urge the Commission to take all steps necessary to protect the integrity of the label.
In the cases of Nectar Sleep, Sandpiper/PiperGear USA, and Patriot Puck specifically, we urge the Commission to assess financial penalties and require admissions of guilt. In all three instances, the companies fraudulently affixed “Made in the USA” labels to foreign-made products, most of which were imported from China. There is a clear financial benefit to companies such as those in question to label their goods as “Made in the USA.” Consumers view American-made goods more positively and are often willing to pay a higher price for them. In addition, consumers may be less likely to have health or quality concerns about a product when its true country of origin is concealed. If the consequences of misusing the “Made in the USA” label do not include paying fines or admitting wrongdoing, it is unlikely that these and other companies will be deterred from using the same deceptive tactics to sell their products in the future.
The value of the “Made in the USA” label is dependent on its integrity. The Commission plays a critical role in ensuring that American-made products are truly made in America. We urge you to require the companies in these cases to pay fines and admit they lied. Failure to take decisive action risks weakening the significance of the “Made in the USA” label and undermining American manufacturers.
Thank you for your consideration of this request.
Sincerely,
Senator Sherrod Brown (D-OH)
Senator Chris Murphy (D-CT)
Senator Tammy Baldwin (D-WI)
Here is the conclusion from STATEMENT OF COMMISSIONER ROHIT CHOPRA In the Matters of Nectar Sleep, Sandpiper/PiperGear USA, and Patriot Puck
Are no-money, no-fault settlements adequate to remedy serious violations of the FTC’s “Made in USA” standard?
… Nectar Sleep, Sandpiper, and Patriot Puck clearly violated the law, allowing them to enrich themselves and harm their customers and competitors. Especially given widespread interest in buying American products, we should do more to protect the authenticity of Made-in-USA claims. I am concerned that no-money, no-fault settlements send an ambiguous message about our commitment to protecting consumers and domestic manufacturers from Made-in-USA fraud.
Going forward, I hope the Commission can better protect against harms to competition and consumers by seeking monetary relief, notice, admissions, and other tailored remedies. Every firm needs to understand that products labeled “Made in USA” should be made in the USA, and that fake branding will come with real consequences.
Click here for the full statement from the commissioner.
What do you think the should be the penalty for misusing the Made in USA label?
Prison terms for the company’s executive officers, and not in a “country club” prison. Fines aren’t adequate. Companies routinely pay fines–or go into bankruptcy and recreate themselves as a new company.
It’s about time companies that fraudulently claim Made in USA get punishedin a meaningful way. Fines are not enough. Maybe some jail time for the CEOs/Presidents would make a difference
When faced with a situation like this I would love to see MAM include a petition with the article that would then be sent to the responsible party. (in this case Chairman Simons) Or maybe a link that when we clicked on it it would open an email form that when filled out would be sent to the Chairman’s office. Hearing from hundreds of angry Americans would make a difference.
Thank you, Charlotte, for the response. We will take this into consideration next time we are faced with a similar situation. Thank you for supporting MAM!
I definitely agree that meaningful MANDATORY prison time for CEOs and other top executive should accompany a fine of a third of the most recently completed fiscal quarter and a forfeit of half of the executives’ total annual compensation is in order. If it’s not a hefty punishment, the practice will continue.
Based on the report, the companies that do this do not get fined, nor are there any penalties. There should be stiff penalties that include fines for the company executives, as well as refunds to customers. This is just a dirty business practice.
I agree with the Jail and forced fines but the Owner/Company execs should loose their jobs and the company should get new people.