Markets Wired

A marketer of iPhone accessories, bottle holders, lens cleaners, dog collars, leashes, and other outdoor accessories has agreed to settle Federal Trade Commission charges that it falsely claimed certain of its products were “Made in the U.S.A,” or “Truly Made in the USA” even though the products contained substantial foreign content.

The proposed settlement prohibits the company from deceiving consumers about the degree to which its products are made in the United States.  

Based in Logan Utah, E.K. Ekcessories, Inc. sells merchandise directly to consumers on its website, ekusa.com, and through online sellers such as Amazon and REI.

The company claimed on its website that “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.”  In fact, the company imports many of its products and components, according to the complaint.  The FTC also alleged that the company distributed deceptive promotional materials for its products to third-party retailers such as Amazon and REI.

The FTC alleged that E.K. Ekcessories, Inc. violated the Federal Trade Commission Act by making false and unsupported statements that its products were all or virtually all made in the United States.

Under the proposed order, the company is prohibited from claiming that any product is made in the United States unless that product is all or virtually all made in the United States.  The company also is prohibited from making any misleading claims about a product’s country of origin and from providing deceptive promotional material to third-party retailers, or otherwise providing the “means or instrumentalities” for others to make deceptive U.S.-origin claims.  The company also is required to contact all distributors who bought or received products between January 1, 2010 and May 1, 2013, and provide them with a notice and a copy of the order.

According to the Commission’s 1997 U.S. Origin Claims Enforcement Policy Statement, for a product to be advertised or labeled as “Made in the U.S.A,” the product must be “all or virtually all” made in the United States – that is, all significant parts and processing must be of U.S. origin, and the product should contain no (or negligible) foreign content.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0.  The FTC will publish a description of the consent agreement package in the Federal Register shortly.  The agreement will be subject to public comment for 30 days, beginning today and continuing through November 21, 2013, after which the Commission will decide whether to make the proposed consent order final.  Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.  Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.  Comments can also be submitted electronically.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  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 up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.