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Fashion Law 101: Don’t “Bamboozle” the FTC

Posted in The Business of Fashion

Last week, WWD reported that the Federal Trade Commission ("FTC") issued over $1.26 million in fines to Macy’s Inc., Sears Roebuck and Co., Amazon Inc and Leon Max Inc. for violations of:

the Textile Products Identification Act and the FTC’s textile rules by labeling and advertising products sold in stores and online as made of bamboo when they were made of rayon.

Yikes!

And to make matters worse, for two years before the retailers were fined, the FTC repeatedly sent them warning letters to stop mislabeling rayon products as bamboo, but the retailers either didn’t care or didn’t want to listen. 

Well, being ignored for two years made the FTC see green, and so it issued the above mentioned 1.26 million dollars in fines while stating:

‘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.’

Now, for those of you unfamiliar with the FTC’s role in the Fashion Business, it acts as a watch dog to protect customers from a variety of evils.  In its own words it goals are:

tp prevent business practices that are anticompetitive or deceptive or unfair to consumers; to enhance informed consumer choice and public understanding of the competitive process; and to accomplish this without unduly burdening legitimate business activity

In sum, the FTC makes sure companies don’t trick customers into purchasing something that purports to be something else. 

Besides fiber content, it famously monitors "Made in the USA" claims, Registered Identification Numbers ("RN"), and most recently issued rules governing fashion bloggers, to name a few.

The take-away here?  Don’t ignore warning letters, and don’t believe everything "green is good."

I can only imagine how the econ-conscious customers must feel!  (ok…..,you guessed it, bamboozled.) 

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