The Federal Trade Commission is moving swiftly to stop fraudulent labeling of products’ origin.
WASHINGTON – The Federal Trade Commission has filed a complaint against the manufacturer of LED lighting and personal protective equipment for allegedly selling the goods as being made in the U.S. when they were not.
The Made in the USA Labeling Rule took effectgov
last year, and this marks the fourth enforcement action the commission has brought against companies for false claims. The stepped-up enforcement and filings signals that the organization is ramping up to take action against companies violating the rule.
The other three enforcement actions against companies included a settlement with Resident Home last year that saw the company pay a $735,000 in fines. The other cases were against a lithium ion battery manufacturer and an apparel company. The battery company was fined $105,319.56, and the apparel brand was fined $211,335.
According to the complaint, Adam Harmon and two companies he controls – Axis LED Group LLC and ALG Health LLC – violated the Made in the USA Labeling Rule, the COVID-19 Consumer Protection Act and the FTC Act. The FTC’s order would stop the companies from claiming deceptively that the products were manufactured in the U.S.
The companies allegedly claimed PPE and light fixtures marketed as being manufactured in the U.S. At the onset of the pandemic in 2020, Harmon started operating as ALG-Health LLC to sell PPE, including masks, gowns and gloves. The products were falsely marketed as being made in the U.S., according to the filing.
The FTC offered a proposed settlement ordering the defendants to pay $157,683.37 in penalties. Another judgement of $2.8 million was suspended due to inability to pay. The commission, however, has the ability to lift the suspension if the financial information provide by the companies is deemed to be inaccurate or incomplete.
The FTC’s Made in USA Labeling Rule took effect Aug. 13, 2021, and prohibits claims that a product was made in the U.S. unless final assembly or processing of the product occurs in the states; all significant processing that goes into the product occurs in the U.S.; and all or virtually all of components of the product are made or sourced in the U.S.
The FTC said in a statement, “Protecting consumers and honest businesses from deceptive Made in U.S.A. claims is a key priority for the Federal Trade Commission.”