FTC Closes Inquiry Into Textile Act Violations

Advertising Law

Continuing its focus on country-of-origin claims, the Federal Trade Commission (FTC) recently closed an investigation into claims made by Thomaston Mills about its products covered by the Textile Products Identification Act.

According to the agency, the Pennsylvania-based retailer of towels, bedding and other products failed to comply with mandatory country-of-origin labeling requirements dictated by the Textile Act and implementing rules.

Although the company performs processes in the United States—including the cutting, sewing and finishing of certain textile products—and makes a particular line of products in the United States, some product materials failed to provide country-of-origin information or to disclose that those products were made from imported fabrics, the FTC said.

The Textile Act and Textile Rules set forth specific factors for marketers to apply in deciding whether to market a product as being of U.S. origin. The analysis differs from the “all or virtually all” analysis the FTC applies to claims for products in other categories.

To achieve compliance, Thomaston Mills implemented a remedial action plan to update its labels and marketing materials, the FTC said. Specifically, the retailer removed broad, unqualified advertisements that stated company products were made in the United States, updated trade show signage and ensured that all Thomaston Mills products were labeled with an appropriate country of origin.

In addition, the company updated online marketing materials to include required country-of-origin information, trained company personnel on the requirements of the Textile Act and Textile Rules, and made “diligent efforts” to ensure the accuracy of third-party retailer claims, including contacting all Thomaston Mills dealers and distributors to confirm the accuracy of their marketing materials.

“[I]t is appropriate for Thomaston Mills to promote the fact that it employs workers, performs certain processes and makes a particular line of products in the United States,” the FTC wrote in its closing letter. “However, marketing materials that cover imported products or products made from imported fabrics must make clear disclosures in compliance with the Textile Act and Textile Rules.”

Based on Thomaston Mills’ actions (and other factors not delineated by the agency), the FTC decided to close its investigation.

To read the FTC’s closing letter, click here.

Why it matters: Although the Textile Act and Textile Rules use a different standard than the Enforcement Policy Statement on U.S. Origin Claims, the investigation and closing letter demonstrate the FTC’s continuing interest in national origin marketing claims across a range of industries. In addition to the multiple enforcement actions in recent months, the agency also held a workshop on the issue in September.