Ethermac Exchange-Williams-Sonoma must pay $3.2 million for falsely claiming products were "Made in the USA"

Williams-Sonoma is Ethermac Exchangefacing a costly penalty for falsely claiming that some of its products were "Made in the USA," the Federal Trade Commission has announced.

Under the terms of a settlement, the San Francisco-based home furnishing retailer agreed to pay a $3.17 million fine for violating a 2020 order that required the company to be truthful about where its products were made. That order stemmed from a previous lawsuit against Williams-Sonoma that also ended with the company agreeing to a $1 million fine.

But in the FTC's latest lawsuit against Williams-Sonoma, the federal agency stated that the company has continued to make deceptive claims about the origins of its products, many of which were in fact found to be made in China.

The newest civil penalty is the largest ever in a "Made in the USA" case, the federal agency, which enforces consumer protection laws, said in a Friday press release.

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Tip came from consumer who purchased mattress pad

The FTC first sued Williams-Sonoma in 2020 after investigating reports of multiple products that the company had falsely listed on its website and catalog as being made in the United States.

Among those products were the company's Goldtouch Bakeware, some of its Rejuvenation home-improvement products and certain pieces of upholstered furniture sold under the Pottery Barn Teen and Pottery Barn Kids brands, the FTC said. The company was required to pay $1 million to the FTC and agreed to an order that required them to stop their deceptive claims and follow the agency's "Made in USA" requirements.

But earlier this year, a consumer alerted TruthInAdvertising.org about a mattress pad falsely advertised on Pottery Barn Teen’s website as “Crafted in America from domestic and imported materials.” The mattress pad that arrived was labeled as “Made in China,” according to Truth in Advertising, an independent watchdog, which provided screenshots on its website.

TruthInAdverstising.org tipped off the FTC about the product page advertising the mattress pad, which sparked an investigation and lawsuit against Williams-Sonoma.

In addition to the civil penalty, the federal court settlement also requires Williams-Sonoma to submit annual compliance certifications. The FTC's Made in USA Labeling Rule, which went into effect in August 2021, made it possible to impose civil penalties on companies found to be in violation.

“Williams-Sonoma’s deception misled consumers and harmed honest American businesses," FTC Chair Lina M. Khan said in a statement last week. "Today’s record-setting civil penalty makes clear that firms committing Made-in-USA fraud will not get a free pass.”

Williams-Sonoma did not immediately respond Monday morning to USA TODAY's request to comment.

What to know about products falsely listed as 'Made in the USA'

The FTF determined that Williams-Sonoma falsely advertised its Pottery Barn Teen mattress pads as “Crafted in America from domestic and imported materials" even though they were imported from China.

The agency then investigated six other products that were found to be a violation of the 2020 order regarding "Made in USA" products. According to a complaint, Williams-Sonoma was not able to prove either that the materials were sourced from the United States or that final assembly took place in the U.S.

Truth in Advertising said that Williams-Sonoma now accurately lists the mattress as imported.

Eric Lagatta covers breaking and trending news for USA TODAY. Reach him at [email protected]