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Four US retailers agree to pay fine on FTC charges
12
Jan '13
Amazon, Inc.; Leon Max, Inc.; Macy’s, Inc.; and Sears, Roebuck and Co. and its Kmart subsidiaries, Kmart Corporation and Kmart, have agreed to pay penalties totaling $1.26 million to settle Federal Trade Commission charges that they violated the Textile Products Identification Act (Textile Act) and the FTC’s Textile Rules by labeling and advertising products sold in stores and online as made of bamboo, while they actually were made of rayon.

While so-called bamboo textiles often are promoted as environmentally friendly, the process for manufacturing rayon – even when it is made from bamboo – is far from a “green” one.

The companies have agreed to pay the following civil penalties to settle the FTC’s charges:Sears ($475,000), Amazon ($455,000), Macy’s ($250,000), and Leon Max ($80,000).  The penalties reflect how long the companies continued to sell mislabeled textiles after receiving an FTC warning letter in early 2010, as well as the amount of products sold.  Each company also will be required to ensure that the labels and ads for bamboo textiles they sell accurately indicate their fiber content.

“When attempting to appeal to environmentally conscious consumers, companies need to ensure they don’t cross the line into misleading labeling and advertising,” said Charles Harwood, Acting Director of the FTC’s Bureau of Consumer Protection.  “If a textile is made of rayon, sellers need to say that, even if bamboo was used somewhere along the line in the production process.”

In 2009, the FTC brought its first set of cases against companies allegedly selling rayon textiles labeled as bamboo.  The agency settled charges against four companies and distributed a business alert advising manufacturers and sellers that if a textile is not made directly with bamboo fiber, it may not be labeled or advertised as bamboo.

In January 2010, the FTC sent warning letters to seventy-eight companies, including Amazon, Leon Max, Macy’s, and Sears, concerning their continuing mislabeling of rayon textiles as bamboo.  The FTC alleges that the four companies continued improperly to label their rayon textiles as bamboo, even after being told in the warning letters that they could face civil penalties if they did not properly label and advertise their textile products.

According to the FTC’s complaints, each of the four companies violated the Textile Act and the FTC’s Textile Rules by advertising and marketing products as being made of bamboo, when, in fact, they were actually made of rayon. 

The FTC complaint alleged that Amazon claimed, without qualification, that the textile fiber in many of its retail and private label products was bamboo.  For example, the company described a “Summer Infant Crib Sheet” as “100% Organic Bamboo.”  It also sold a product called the “Scene Weavers Pickles 100% Bamboo Knit Garden Stripe Baby Blanket,” claiming it was comprised of “100% knit bamboo.”

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