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FTC to take $1.26 million from false advertisers

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Staff writer ▼ | January 7, 2013
FTC rayon bambooThe Federal Trade Commission started the new year with a strong message to false advertisers: Amazon, Leon Max, Macy's, Sears, Roebuck and Kmart will pay $1.26 million for labeling rayon as bamboo.


Amazon.com, Leon Max, Macy’s, and Sears, Roebuck and Co. and its Kmart subsidiaries, Kmart Corporation and Kmart.com, have agreed to pay penalties totaling $1.26 million to settle Federal Trade Commission (FTC) 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.

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.

FTC also mentioned pharma companies in its newest statement: "If you purchased any Accelis, nanoSLIM, Cold MD, Germ MD, or Allergy MD product, the Federal Trade Commission wants you to know that you may be eligible for a refund."

In 2010, the FTC charged Iovate Health Sciences U.S.A. and two affiliated Canadian companies with deceptively advertising that the supplements named above could help consumers lose weight or could treat and prevent colds, flu, and allergies. In settling with the FTC, Iovate agreed to pay $5.5 million for consumer refunds.

Consumers who bought any of these five dietary supplements between January 2006 and July 2010 will have until April 1, 2013, to apply for a refund by filing a claim form online or calling 1-877-576-9978 to request a paper claim form in the mail.

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