Government Cracking Down on "Made in USA" Claims

By: CBS MoneyWatch
By: CBS MoneyWatch
Regulators say some products bearing the "Made in USA" label were actually made elsewhere.

(Image: Maurizio Gambarini / European Pressphoto Agency)

July 23, 2014

CBS MoneyWatch - It's hard to manufacture goods in the United States. Raw materials are costly and employee wages are comparatively high. You have to deal with stringent regulations, labor rights, health care and business taxes.

Or you can just pay a couple thousand bucks for a license to use the "Made in USA" label. And that's what federal regulators say happened.

The Federal Trade Commission says that the company that issues the "Made in USA" certification seal let partners use the seal without checking that the products were in fact made in the U.S. The agency claims that some products with the Made in USA mark contained "significant imported content." Regulators add that the company has never rejected an application to use its certification seal.

Companies used that certification to make their products more attractive to American shoppers, and they got it for a song. Made in USA, launched in 2009, charged only between $250 and $2,000 for a one-year license to use that seal, describing it as a "non-mandatory brand enhancer and identifier of goods made or grown in the United States."

Made in the USA also seems to stoke a sense of economic patriotism, letting visitors to its website sign a declaration that reads: "I pledge to buy American made products and to look for labels and tags that proudly state: Made in USA. I make this pledge because I believe in strengthening American workers, American companies and the American economy."

The company, Made in the USA Brand, said Tuesday that it did not admit to any improper representations in settling the federal claims and that it didn't pay any financial penalties. "We view this settlement as a positive opportunity to align with the FTC to ensure that the Made in USA brand meets the highest standards of clarity and trust," the company said.

Going forward, the FTC says, Made in the USA can't claim any product is made in the country unless it has proof. If it can't get proof, it must disclose that its partners are certifying themselves as manufacturing goods exclusively in the U.S.

"When marketers provide seals without any verification, or without telling consumers the seal is unverified, consumers are deceived and the value of all marketers' seals is diminished," said Jessica Rich, head of the FTC's Bureau of Consumer Protection, in a statement. "This case makes it clear that the FTC will not let that happen."

The commission's agreement with Made in the USA is open to public comment for the next month. After that, the commission will decide whether to make the agreement final. The public can make comments on this site.

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