The federal government has fined two of the nation’s best-known retailers — Walmart and Kohl’s — for deceptive marketing practices.
The Federal Trade Commission (FTC) announced the two retailers falsely marketed dozens of rayon textile products as bamboo, and suggested that the products were made using eco-friendly processes. In reality, toxic chemicals that produce hazardous pollutants are used when converting bamboo into rayon.
The FTC says the two retailers marketed sheets, towels and other housewares as being good for the environment, stating that they were “free of harmful chemicals, using clean, non-toxic materials.”
The fact that the retailers did not alert customers that the “bamboo” products actually were made of rayon derived from bamboo — which the FTC describes as “synthetic rayon” — is a violation of the FTC Act and the Textile Act and Rules, the FTC says.
The federal agency goes on to explain:
“Natural bamboo fabric is often rough or scratchy, so it’s rarely used in fabric you touch, like sheets or clothes. If you see ‘bamboo’ sheets advertised as soft and silky, it means the bamboo has been chemically treated and turned into rayon.
By law, a company’s labels and ads for sheets, towels, blankets, and other textiles must tell you the fibers they’re made with, and only those fibers.”
For their transgressions, both retailers will pay large fines. Walmart must pay a fine of $3 million, and Kohl’s owes $2.5 million. In addition, the retailers must stop making their deceptive eco-friendly claims — which the FTC says they have been doing since at least 2015.
The FTC says the fines are “by far the largest penalties in this area.” In a press release, Samuel Levine, director of the FTC’s Bureau of Consumer Protection, says:
“False environmental claims harm both consumers and honest businesses, and companies that greenwash can expect to pay a price.”
The FTC’s Penalty Offense Authority allows the agency to seek civil penalties when it finds that a company knew its conduct “was unfair or deceptive in violation of the FTC Act.”
Such companies can be penalized so long as the FTC has previously issued a written decision that the conduct in question is unfair or deceptive.
The FTC says that in recent months, it has “revived” the Penalty Offense Authority and expanded it to address other matters, including:
- False earnings claims
- False job placement claims
- Deceptive reviews
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