Possible changes loom for FTC's Textile Rules
Never let it be said that the FTC doesn’t have your back — or sleeve, cuff, waistband, or wherever else you find the label that discloses the kind of fabric a product is made of. If your business touches on textiles, you’re familiar with the requirements of the Textile Fiber Products Identification Act and the FTC’s accompanying Textile Rules. Are you in the loop on proposed changes that could affect your company?
The Textile Act and Rules require marketers to attach a label to each covered product disclosing:
- the generic names and percentages by weight of the product’s fibers;
- the name or Registered Identification Number (RN) of the manufacturer or other responsible company; and
- the name of the country where the product was processed or manufactured.
The FTC has proposed some amendments that would update and clarify the Rules and provide businesses with more flexibility in disclosing fiber content information. How is the FTC proposing to tailor the Textile Rules? Here are a few of the suggested alterations:
Fiber names. The Rules require that labels identify manufactured fibers using the fiber’s generic names. The FTC is thinking about updating section 303.7 to ease barriers to trade by permitting more internationally-recognized fiber names used in the International Organization for Standardization’s latest standard for generic names of man-made fibers. (The current Rule uses an older version of the ISO standard.)
Hang-tag disclosures. Right now, the Rules don’t allow the use of product hang-tags touting fibers and their attributes unless the hang-tag discloses the product’s full fiber content information. To address this issue, the FTC proposes revising section 303.17(b) to allow certain hang-tags disclosing fiber names and trademarks, and non-deceptive performance information, without disclosing the product’s full fiber content. What about the possibility that info on the hang-tag could mislead consumers? Unless the hang-tag discloses the product’s full fiber content or the product is entirely made of that fiber, the FTC thinks the hang-tag should clearly and conspicuously tell potential buyers that there’s more to know. Possible disclosures: “This tag does not disclose the product’s full fiber content” or “See label for the product’s full fiber content.”
Country of origin. The Rules require labels to disclose the country where the product was processed or manufactured. The FTC proposes amending sections 303.33(d) and (f) to clarify that the country where an imported product is processed or manufactured is the country of origin as determined under the laws and regs enforced by Customs.
E-commerce. The Rules already address electronic commerce, but the FTC proposes to clarify them further by amending the definition of the terms “invoice” and “invoice or other paper” in section 303.1(h) to: (1) replace the word “paper” with “document”; (2) state explicitly that those documents can be issued electronically; and (3) allow for the preservation of records in forms other than paper.
Guaranties. The FTC suggests updating the Rules’ continuing guaranty provisions in sections 303.37 and 303.38 by requiring a certification in place of the current requirement that suppliers provide a guaranty signed under penalty of perjury. In addition, the FTC proposes that guaranties remain effective for one year unless revoked earlier. Annual renewal should encourage guarantors to take steps to ensure they’re still in compliance over time and thereby increase the guaranties’ reliability.
FTC Enforcement Policy Statement. Due to changes in the textile industry — for example, increased imports — some businesses can’t get guaranties. The FTC believes it’s in the public interest to provide protections for retailers that: (1) can’t legally get a guaranty under the Act; (2) don’t embellish or misrepresent claims made by the manufacturer; and (3) don’t market the products as private-label goods. But there’s a big caveat to that: If a retailer knew or should have known the marketing or sale of an item would violate the Textile Act or Rules, those protections won’t apply. That standard was explained in a January 2013 FTC Enforcement Policy Statement.
Now it’s your turn to fashion a response to the FTC’s proposals. File online by July 8, 2013.