The Federal Trade Commission announced a consent order and six-figure monetary penalty Tuesday with motocross and all-terrain vehicle parts maker Cycra over the company’s false “Made in the USA” claims.
The FTC said from 2019 through at least last May 31, Cycra displayed the U.S. flag and the words “Made in the USA” on product pages online, and on the labels of its wares. But the agency said Cycra received shipments of parts and accessories from Asia and Europe.
The portion of foreign-made materiel in Cycra “Made in the USA” products was significant, according to the FTC complaint.
In at least two other instances, fully finished products actually made in Taiwan were sold by Cycra as American-made products.
The order stipulates that Cycra will be prohibited from claiming a product was American-made without further qualification, unless it can prove that the parts are American and that the product was assembled in America.
For qualified claims, Cycra will have to disclose exactly how many foreign parts are contained, or how much foreign assembly was used in the manufacture of a product sold as American-made.
The full amount in the judgment was $872,577 but, due to Cycra’s inability to pay, the amount was lowered to $221,385. Cycra agreed to the FTC order, which has not yet been finalized.
Customers who were sold Taiwan-made products sold as “Made in the USA” will also have to be notified by Cycra, the FTC order says.