California-based Nectar Brand LLC has reached a settlement with the FTC regarding false claims of “Made in USA” for their products. The complaint against Nectar claimed the “Designed and Assembled in USA” advertisement on their products were false. The FTC alleges that the Necar Brand products are wholly source and assembled in China.
Under the terms of the proposed settlement (PDF), Nectar would be prohibited from making “unqualified” claims for their products’ country of origin. To meet this requirement, the FTC states that a “clear and conspicuous” description must be made as to the extent the product contains foreign parts, ingredients, and/or manufacturing and/or processing.
The FTC has also prohibited Necar from making any further unqualified country-of-origin claims for their products reflected in marketing materials. This would include, but not be limited to, website banners, promotional emails, and direct communication channels such as social media.
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The FTC outlines the qualifications for making acceptable country of origin claims:
- the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States;
- a clear and conspicuous qualification appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients or components, and/or processing; or
- for a claim that a product is assembled in the United States, the product is last substantially transformed in the United States, the product’s principal assembly takes place in the United States, and United States assembly operations are substantial.
Also, from the FTC official complaint, the official definition of what a “Made in the United States” claim would appear as:
“Made in the United States” means any representation, express or implied, that a product or service, or a component thereof, is of U.S.-origin, including, but not limited to, a representation that such product or service is “made,” “manufactured,” “built,” or “produced” in the United States, or any other U.S.-origin claim.
While this claim, and subsequent action, may not seem serious in nature, the requirements are anything but simple. Nectar Brand LLC will be required to submit records of materials, revenues, and sales for the next 20 years, maintaining an account of the most recent 5 years.
The FTC also required Nectar to submit copies of all advertising materials in which the claims ruled as false were made.
About Nectar Brands LLC
Nectar Brands LLC is a California-based manufacturer specializing in memory foam mattresses and other bedding-related home goods products. They operate under the trade names Nectar Sleep as well as DreamCloud. The Nectar Sleep memory foam mattress is one of the leading sales performers in the online mattress market as is the DreamCloud Luxury Hybrid Mattress which targets a different price point.