Accessories for the iPhone, bottle holders, lens cleaners, and dog collars and leashes were among items for sale by a Utah company on its website and by third-party sellers such as Amazon and REI. The company claimed products were “Made in the USA” and “Truly Made in the USA.”
“Our source of pride and satisfaction abounds from a true ‘Made in USA’ product,” the company said on its website.
Turns out, it lied, at least about some products, the Federal Trade Commission alleges. In fact, the company imports some products and components, the FTC said.
The company, EK Ekcessories, recently settled with the FTC after the agency alleged the company was deceiving consumers with its claims of products being American-made.
EK Ekcessories said in a statement it was unaware of the FTC’s “strict application” for Made in USA guidelines.
The FTC case highlights the confusion – and sometimes, deception – around what exactly Made in the USA means to consumers.
Buying American-made products is a big deal for a lot of people. In a survey by Consumer Reports National Research Center, 78 percent of Americans would rather buy the American product when given a choice between it and an identical one made abroad. And more than 60 percent said they would buy American-made clothes and appliances even if they cost 10 percent more than imported versions.
The topic of buying American can get emotional and political. But Spending Smart is often about getting better value for your money. If you believe part of a product’s value to you is that it is American-made, here are some things to know.
• What Made in the USA means: The standard to claim a product is made in the U.S., according to an FTC rule from 1997, is that “all, or virtually all,” of the product was made in the United States. The product should contain “no, or negligible,” foreign content. But there are no hard-and-fast percentages. The FTC looks at such factors as the final place of assembly, product costs attributable to various countries, and how far back in the manufacturing chain the foreign content is, said Julia Solomon Ensor, the FTC attorney in charge of the EK Ekcessories case.
The Utah company says it only recently started to offer “a few new lines of products” that had components made offshore. And those products were assembled in the U.S., it said.
Still, it failed to meet the strict requirements for Made in the USA for some products.
• How to determine if something is American-made: Many products are not legally required to carry a label identifying where they were made, nor are retailers required to disclose the information. But, according to the FTC, most textiles and wool products must identify where they were made.
Automobiles made since Oct. 1, 1994, for sale in the U.S. must have a label stating where the car was assembled. The label also must specify the percentage of equipment made in the U.S. and Canada, and the country where the engine and transmission were made.
Unfortunately, it’s “nearly impossible” for the average consumer to determine whether a product is truly made in the U.S., Ensor said. But if you find a company is making an overly broad claim about Made in the USA, file a complaint at FTC.gov or call 877-FTC-HELP.
“It’s a tough question that I get asked a lot,” Ensor said. “I wish I had a better answer.”
• Read labels carefully: A loophole in the strict Made in the USA rule is that a claim can have qualifiers, such as “Made in the USA, with some components assembled in Mexico.” In those cases, the FTC has to make a decision on whether to crack down on such a claim. It uses the test, “How would a reasonable consumer, seeing the claim in context, understand it?”
A picture of an American flag or advertising with imagery associated with the United States does not mean it was made in the U.S.
• What an American car is: The notion of buying an American car is especially complicated because so many foreign automakers use American-made parts and have assembly plants in the U.S. while profits flow to a foreign company. Meanwhile, some U.S.-based automakers use some foreign parts and labor. So that becomes a judgment call based on your personal definition of “American car.”
• Follow the profits: Roger Simmermaker, author of the book “How Americans Can Buy American,” suggests starting more simply than with vehicles and appliances. Start in the supermarket “where, ultimately, you spend more of your time and more of your money.”
Making choices at the supermarket often involves similar items about which consumers don’t have a strong preference. So it’s easy to make a switch if buying American is important to you, he said.
His idea is not to just buy American-made products but products from American companies, which pay more taxes than foreign firms.
For example, even though both are American-made and known to be quality brands, Clorox is owned by an American company and Lysol is owned by a British company. Prego is American-owned; Ragu is owned by Unilever, which traces ownership to England and the Netherlands.
Simmermaker says that if you have a strong preference for a brand, go ahead and choose it. But when it’s a toss-up, buy from an American company.
• Get an online assist: Several websites identify products made in the U.S. and/or made by American companies. Simmermaker’s website, HowToBuyAmerican.com, can help you identify which companies make which brands. Other sites sell items they claim are American-made. They include MadeInUSAForever.com and AllAmericanClothing.com.
• Retailer help: Some major retailers will help you identify American-made products. One trick is to try typing “Made in the USA” into a retailer’s online search box, Simmermaker said. Sometimes the search will return products that are American-made. It works with Nordstrom.com, Walmart.com and Amazon.com, for example.