Dickson Burton, an attorney with TraskBritt in Salt Lake City that represented E.K. in the complaint, said the company thought it was on sound footing with its advertisements but has agreed to drop the made in the USA claims.
"Apparently, the FTC takes a strict interpretation of what made in the USA means," said Burton. "E.K. believed they were on sound footing. They added a couple of products where some components were made offshore, imported and then assembled in the USA. For 28 years before that, all of the components were made in the U.S. and that is still the case with the majority of its products."
Burton said E.K. reached a settlement, though the company believes that it was accurately representing that most of its products were made in America.
"They are not going to make that claim any longer given the FTC's ruling," said Burton. "E.K. believes that there are probably a lot of companies unaware they may be in violation of this strict interpretation, an interpretation E.K. would say is overly strict. But they wanted to go along with the FTC and be fully compliant."
A claim on the company's website caught the attention of the federal agency.
"For 28 years, E.K. Ekcessories has been producing superior quality made accessories in our 60,000 square foot facility in Logan, Utah," read one.
"Our source of pride and satisfaction abounds from a true 'Made in the USA' product," read another.
The FTC said the company imports many of its products and components, a violation of the Federal Trade Commission Act.
Under the proposed order, the company is prohibited from claiming that any product is made in the United States unless that product is all or virtually all made in America. The company must contact all distributors who bought or received products between January 1, 2010, and May 1, 2013, and provide them with a notice and a copy of the order.
According to the Commission's 1997 U.S. Origin Claims Enforcement Policy Statement and a press release on the settlement released this week, for a product to be advertised or labeled as "Made in the U.S.A," the product must be "all or virtually all" made in the United States that is, all significant parts and processing must be of U.S. origin, and the product should contain no (or negligible) foreign content.
The public can comment on the ruling through Nov. 21, before the Federal Trade Commission decides whether to make the proposed consent order final.
The FTC release said that comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments also can be submitted electronically.