Markets Wired

A Georgia-based distributor of water filtration systems will stop making misleading unqualified claims that its products are made in the United States, under a settlement with the Federal Trade Commission.

In its complaint against iSpring Water Systems, LLC, the FTC alleged that the company deceived consumers with false, misleading, or unsupported claims that its water filtration systems and parts are “Built in USA,” “Built in USA Legendary brand of water filter,” and “Proudly Built in the USA.” In fact, according to the complaint, iSpring’s products either are wholly imported or are made using a significant amount of inputs from overseas.    

“Supporting American manufacturing is important to many consumers. If a product is advertised or labelled as ‘made’ or ‘built’ in the USA, consumers rightly expect that to be the case when they part with their hard-earned money,” said Acting FTC Chairman Maureen Ohlhausen. “This is an important issue for American business and their customers, and the FTC will remain vigilant in this area.”

iSpring markets water filtration products to consumers on its website, and through third parties that include Amazon, Overstock, and the websites of Sears, Home Depot, and Walmart.

The stipulated final order prohibits iSpring from making unqualified “Made in USA” claims for any product unless it can show that the product’s final assembly or processing – and all significant processing – take place in the United States, and that all or virtually all ingredients or components of the product are made and sourced in the United States. iSpring also is prohibited from making any country-of-origin representation about its products unless it possesses and relies upon a reasonable basis for that representation. The order permits iSpring to make qualified “Made in USA” claims as long as they include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing. 

More information about the FTC’s consent agreement can be found in the analysis to aid public comment.

The Commission vote to issue the complaint and accept the proposed consent order was 3-0. The FTC will publish 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 March 3, 2017, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice. 

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 $40,654.

The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides further guidance on the Made in USA standard.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.