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Major Retailers Fined Over Textile Mislabeling

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Amazon.com, Leon Max, Macy’s, Sears Roebuck and Co., and its Kmart subsidiaries, have agreed to pay penalties totaling $1.26 million for allegedly falsely labeling textiles sold in stores and online as made from bamboo, when they were actually made of rayon.

The retailers will pay the penalties to settle Federal Trade Commission (FTC) charges that they violated the Textile Products Identification Act and the FTC’s Textile Rules by mislabeling and advertising products. “While so-called bamboo textiles are often promoted as environmentally friendly, the process for manufacturing rayon–even when it is made from bamboo–is far from a green one,” said the FTC.

Amazon has been fined $455,000, Leon Max will pay $80,000, Macy’s has agreed to pay $475,000 and Sears will pay $475,000. 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.

“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, even if bamboo was used somewhere along the line in the production process.”

In addition to civil penalties, the companies will also be required to ensure that the labels and ads for bamboo textiles accurately indicate their fiber content. According to the FTC’s recently released Enforcement Policy Statement, US retailers can avoid liability for mislabeling or false advertising if they rely in good faith on a “guaranty” from a US supplier that certifies the products it provides are not mislabeled, falsely invoiced, or falsely advertised.

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