Black & Decker and its Subsidiary, Kwikset Corp., Agree to Settle FTC Charges of Making Misleading "Made in USA" Claims

The Black and Decker Corporation and its wholly owned subsidiary, Kwikset Corporation, have agreed to settle Federal Trade Commission charges that they misrepresented that certain of Kwikset's residential locks and lock systems (locksets) are made in the United States. According to the FTC, these representations were false or misleading because these products were actually made with significant foreign components. The proposed settlement would prohibit the companies from misrepresenting the extent to which their Kwikset lockset products are made in the United States.

In December 1997, after a comprehensive policy review, the FTC concluded that "Made in USA" advertising and labeling claims must continue to conform to the "all, or virtually all" standard that traditionally has been applied by the Commission. Under this standard, unqualified U.S. origin claims must be substantiated by evidence that a product is "all, or virtually all," made in the United States. In addition, the agency issued an Enforcement Policy Statement outlining the factors the Commission will consider in determining whether a U.S. origin claim is "deceptive." In December 1998, the FTC issued a new business guide: "Complying with the Made in USA Standard." This guide describes the principles of the FTC's standard for such claims and uses examples to help businesses understand how to comply with the standard.

The Black & Decker Corporation is based in Towson, Maryland. Kwikset Corporation is based in Irvine, California. According to the FTC's complaint, advertising and packaging for certain Kwikset products contained such representations as:

Advertising:

Kwikset's Web site:

"Headquartered in Irvine, California, Kwikset produces all of its products in the United States at four manufacturing facilities, employing more than 2,700 people;"

Packaging:

Kwikset Tylo Unkeyed Knobs ("Lockset"): "All American Made" with star and stripes shield (on top, front, and side panel);  

"ALL AMERICAN MADE AND PROUD OF IT" inside star and stripes shield (on bottom panel) and

In small print on side panel the words "ASSEMBLED IN MEXICO."

The FTC's complaint charges that through such means, the respondents have represented that certain of their locks and lock systems are made in the United States, i.e., that all, or virtually all, of the component parts of the products are made in the United States, and the labor in manufacturing the products is performed in the United States. According to the FTC, these representations were false or misleading because these products were actually made with significant foreign components.

The proposed settlement would prohibit the respondents from misrepresenting the extent to which their Kwikset lockset products such as locksets, deadbolts, knobs and handles, are made in the United States.

In addition, the proposed settlement contains a number of recordkeeping and reporting requirements designed to assist the FTC in monitoring compliance with the terms of the order.

The Commission vote to accept the proposed consent agreement for public comment was 5-0. An announcement regarding the proposed consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment until January 29, 2001, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

For additional information about the Commission's Made in USA policy, visit our "Made in USA" web site at <http://www.ftc.gov/os/statutes/usajump.htm.>

Note: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.

Copies of the complaint, the proposed consent agreement and an analysis of the agreement to aid in public comment are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for consumers to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.   To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the online complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.

(FTC File No.: 002 3194)