Rise in Apparel Related Penalties Suggests Increased Oversight by FTC
Substantial increases went into effect earlier this week on August 1, 2016 from what had formerly been the maximum penalty amounts issued by the U.S. Federal Trade Commission (FTC) on a variety of apparel related violations. Examples include an increase from $210 to $525 per day for a violation of failing to maintain the required records under the Wool Products Labeling Act to that of “misbranding,” which encompasses a broad range of labeling errors including that of incorrectly identified fiber disclosures or garment care instructions, which saw a whopping increase from $16,000 per violation to $40,000.
Clearly, the FTC is sending a signal that it is serious about its expectation that those selling fashion merchandise must exercise due diligence in their product compliance protocols, which is a newly expanded area of law that the Clark-Esposito Law Firm, P.C. is helping apparel sellers navigate. It should be remembered that as all imported goods must comply with US laws at the time of importation, anyone importing merchandise must have ensured their foreign manufacturers have correctly labeled all products and certified to such on their compliance certificates. A failure to do so could lead the importer itself to being subject to an allegation of an FTC violation with the accompanying threat of penalties.
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