The Federal Trade Commission has ordered Lancaster County-based Bollman Hat Co. to stop what it calls deceptive use of its “American Made Matters” certification and marketing materials, and to prove any such claims to U.S. origin in the future.
Bollman President and CEO Don Rongione said the company is fully cooperating with the FTC’s order, but denies that the company intentionally misled consumers.
“We have never, ever labeled anything made outside of the USA as ‘made in the USA,’ or ‘American Made Matters,’ ” he said.
Bollman makes hats from wool, straw, fur and various yarns at its Adamstown factory, Rongione said. Under federal law, items made from wool can be labeled as “made in the USA” no matter the origin of the wool used.
However, the same protections do not exist for straw hats made with material sourced from outside of the country, Rongione said.
Under the settlement with the FTC, those straw hats cannot be labeled as being “made in the USA” without essentially proving that the source material was also from the U.S., Rongione said.
It is the third time in the past year that the FTC has filed a “made in USA” complaint against an American company.
A bottled water company in Georgia, and a Texas-based distributor of pulley block systems were flagged for allegedly making false claims that their products were American-made.
The Bollman case stems from a complaint filed with the FTC about a year ago in which someone alleged the hat maker’s claims of its products’ American origin were incorrect.
After investigating, the FTC concluded that Bollman, and its subsidiary, SaveAnAmericanJob LLC, deceived consumers with terms such as “American Made Matters,” “Choose American,” and “Made in USA since 1868.”
According to the FTC, more than 70 percent of the company’s hat styles “are wholly imported as finished products,” and that material in many other hats also was imported.
Rongione said that while 70 percent of Bollman’s hats were made outside of the U.S., “none of those hats have any labeling about being made in the U.S. unless they were finished in our factory in the U.S.”
Bollman sells hats under the Bollman, Bailey Western, Betmar, Country Gentleman, Eddy Bros., Helen Kaminski, Jacaru, Kaminski XY, Kangol, Karen Kane, and Pantropic labels, and under private-label brand names.
Additionally, the FTC said that Bollman and SaveAnAmericanJob, a subsidiary whose board of directors included several American-based manufacturers, further deceived consumers through its “American Made Matters” program.
That program was launched by SaveAnAmericanJob in 2010 more than a year after a painful downsizing at Bollman’s Adamstown plant. It was designed to educate consumers about the importance of buying American-made products, according to Rongione.
As part of that program, SaveAnAmericanJob created an “American Made Matters” seal that could be purchased for $99 per year by companies for use on their products.
To qualify for the license, companies had to show that half the money spent on materials was spent in the U.S., and that the products were assembled or transformed into final form in the U.S.
According to Rongione, that definition of American-made is different from the FTC’s definition of American-made.
The FTC says that in order to avoid misleading consumers, “marketers should clearly disclose the foreign manufacture of a product.”
“We were very transparent in saying that the standard was different than the Federal Trade Commission’s standard,” Rongione said.
“Those of us in the fashion and textile industry know the difficulty of finding U.S.-made component parts and raw materials because most suppliers have moved offshore,” he said.
“We make a straw hats,” he said. “You can’t find handwoven straw hat blanks in the US,” he added.
“Looking forward, my hope is that the government will look at this standard and update it to make it more realistic with today’s manufacturing ability,” Rongione said.Read more here