Ispring Water Systems, LLC
Volume 163 · 163 F.T.C. 534
deceptive advertisingproduct labelingonline internet
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Ispring Water Systems, LLC, 163 F.T.C. 534 (2017). Consumer Law Library, https://consumerlawlibrary.org/decisions/v163-0014
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VOLUME 163
Complaint
IN THE MATTER OF
ISPRING WATER SYSTEMS, LLC
CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT
Docket No. C-4611; File No. 172 3033 Complaint, April 6, 2017 – Decision, April 6, 2017
This consent order addresses iSpring Water Systems, LLC’s marketing, sale, and distribution of water filtration systems and associated parts and accessories with claims that the products are of U.S.-origin. The complaint alleges that respondent represented that all of its products are “Built in USA,” when in fact, in many instances, respondent’s products are wholly imported or have significant inputs to its products sourced from overseas. The consent order prohibits iSpring from making U.S.-origin claims for its products unless either: (1) the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States; or (2) a clear and conspicuous qualification appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients, and/or processing.
Participants
For the Commission: Julia Solomon Ensor.
For the Respondent: Pearl Cai, Vice President, pro se.
COMPLAINT
The Federal Trade Commission, having reason to believe that iSpring Water Systems, LLC, a limited liability company (“Respondent”), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that this proceeding is in the public interest, alleges:
1. Respondent iSpring Water Systems, LLC (“iSpring”), also doing business as 123filter.com, is a Georgia limited liability company with its principal office or place of business at 3020 Trotters Parkway, Alpharetta, GA 30004.
ISPRING WATER SYSTEMS, LLC 535
Complaint
2. Respondent advertises, labels, offers for sale, and distributes products to consumers, including, but not limited to, water filtration systems and parts. Respondent advertises these products primarily online, including, but not limited to, on its own website 123filter.com, and through third-party websites including, but not limited to, amazon.com, overstock.com, sears.com, and homedepot.com. Respondent offers for sale, sells, and distributes its products throughout the United States.
3. The acts and practices of Respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act.
4. Respondent has disseminated or has caused to be disseminated advertisements and promotional materials for its products, including, but not necessarily limited to, the attached Exhibits A-C. These materials contain the following statements, among others:
a. “Built in USA Legendary brand of water filter” (Exhibit A, 123filter.com web advertisement);
b. “Built in USA” (Exhibit B, search result demonstrating instances phrase occurs on 123filter.com website);
c. “Built in USA” (Exhibit C, amazon.com, sears.com, walmart.com, and purwaterfilter.org product listings).
5. In numerous instances, including, but not limited to, the promotional materials shown in Exhibits A-C, Respondent has represented, expressly or by implication, that its products, including, but not limited to, water filtration systems and parts, are all or virtually all made in the United States.
6. In fact, in many instances, Respondent’s products are wholly imported. In other instances, Respondent sources significant inputs to its products from overseas.
7. Therefore, Respondent’s express or implied representations that its products are made in the United States deceive consumers.
VOLUME 163
Complaint
COUNT I (False or Unsubstantiated Representation)
8. In connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of its products, Respondent has represented, directly or indirectly, expressly or by implication, that such products, including, but not limited to, water filtration systems and parts, are all or virtually all made in the United States.
9. In fact, in many instances, Respondent’s products are wholly imported. In other instances, Respondent sources significant inputs to its products overseas. Therefore, the representation set forth in Paragraph 8 is false or misleading, or was not substantiated at the time the representation was made.
VIOLATION OF SECTION 5
10. The acts and practices of Respondent, as alleged in this complaint, constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
THEREFORE, the Federal Trade Commission, this sixth day of April, 2017, has issued this Complaint against Respondent.
By the Commission.
ISPRING WATER SYSTEMS, LLC
Complaint
Exhibit A
iSpring #ADP16 Pressure Gauge 0 220 psi 1/4 inch fitting | iSpring Wate... http://www.123filter.com/catalog/iSpring-123filter-pressure-gauge-0-220...
1 of 1 11/16/2016 2:58 PM Exhibit A
VOLUME 163
Complaint
Exhibit B
"built in usa" site: 123filter.com - Google Search Page 1 of 1
"built in usa" site: 123filter.com
All Shopping News Videos Images More Settings Tools
About 5,480 results (0.67 seconds)
iSpring Water Systems - #1 Best Seller Reverse Osmosis Water Filter https://www.123filter.com/ Get clean water! BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS - HOME - Knowledge Base - Installers - Pristine ... You've visited this page on 11/15/19.
Our Contact Information | iSpring Water Systems - #1 Best Seller ... www.123filter.com/contactus.html Get clean water! BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS - Thank you for visiting our website! You have any ...
About Us | iSpring Water Systems - #1 Best Seller Reverse Osmosis ... www.123filter.com/aboutus.html Get clean water! BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS - HOME - Knowledge Base - Installers - Pristine ...
Faq | Installation manual | iSpring Water Systems - #1 Best Seller ... https://www.123filter.com/faq/water-filtration-system-faq.html Get clean water! BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS - HOME - Knowledge Base - Installers - Pristine ...
Parts and Accessories | iSpring Water Systems www.123filter.com/catalogsearch/result/?q=parts+and+accessories.html ... a range of high quality parts and components for drinking water systems at 123filter.com ... BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST ...
iSpring #RCC7 ROCT 5-Stage Residential Under-Sink Reverse ... www.123filter.com/iSpring-5-stage-ro-system-w-remineralizer-w-cr7-combo.html Get clean water! BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS - HOME - Knowledge Base - Installers - Pristine ...
Replacement Water Filter Packs | iSpring Water Systems www.123filter.com/catalog/category/view/s/replacement-cartridge/id/... Get clean water! BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS - HOME - Knowledge Base - Installers - Pristine ...
Warranty Registration | iSpring Water Systems - #1 Best Seller ... www.123filter.com/warranty_registration.html BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI. We do not have the order information from vendors other than 123filter.com, and continue supplying replacement filter cartridges at factory direct prices.
Privacy Policy | iSpring Water Systems - #1 Best Seller Reverse ... www.123filter.com/privacy.html BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST ... 123filter.com knows that you care how information about you is used and shared, and we ... and store any information you enter on our Web site or give us in any other way.
Conditions of Use | iSpring Water Systems - #1 Best Seller Reverse ... https://www.123filter.com/catalog/conditions.php 123filter.com accept your return request within 30 days for a refund - original package, unused. BUILT IN USA WITH WQA GOLD SEAL CERTIFICATION AGAINST NSF/ANSI STANDARDS ... Quoted prices are exclusive of all taxes. Purchaser ...
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https://www.google.com/?gws_rd=ssl 12/9/2016 Exhibit B
iSPRING WATER SYSTEMS, LLC
Complaint
Exhibit C
iSpring RCC7 - WQA Gold Seal Certified - 5-Stage 75 GPD Residential Under-Sink Reverse Osmosis Drinking Water Filtration System by iSpring ★★★★★ 2,148 customer reviews | 690 answered questions #1 Best Seller in Faucet Water Dispensers Price: $175.00 & FREE Shipping. Details You save: $174.99 (50%) Available at a lower price from other sellers that may not offer free Prime shipping. In Stock.
Want it Monday, Oct 30? Order within 20 hrs 58 mins and choose Two-Day Shipping at checkout. Details Ships from and sold by Amazon.com in easy-to-open packaging. Gift-wrap available.
Want your water filter replaced by a professional? Have water filter replacement service as directly on Amazon. Backed by our Happiness Guarantee. Estimate $130.00
- Rejects up to 99% of 1,000+ pollutants including chlorine, fluoride, lead, arsenic, pesticides, pathogens, sulfur, heavy metals, and more - Eliminates 99% of 1,000+ pollutants - European Union's TÜV SÜD tested and certified - Gold Seal WQA Certified - Leak-free design - 30-day money-back guarantee - Lifetime support - Proudly built in the USA
Roll over image to zoom in
iSpring RCC7 - WQA Gold Seal Certified - 5-Stage 75 GPD Residential Under-Sink Reverse Osmosis Drinking Water Filtration System $175.00 & FREE Shipping. Details In Stock. Ships from and sold by Amazon.com in easy-to-open packaging. Gift-wrap available.
The faucet will be presented in your order exactly as shown in the image. The faucet's brushed nickel finish is a high-quality look and appearance. It will provide a convenient fit with your other fixtures.
Cost will be a flat rate on filter. With Prime, you'll get free shipping on this item for a flat charge before a problem occurs.
The water travels the better. The ROCT is the only system in its class to have the WQA Gold Seal Certification. Don't settle for anything less!
The ROCT is the only system in its class to have the WQA Gold Seal Certification. Don't settle for anything less!
View larger
Lifetime Support Exceptional Customer Service Knowledgeable support team available via phone or email to assist with all of your installation and maintenance needs.
Superior Performance Gold Seal WQA Certified Independently tested and certified by the Water Quality Association to ensure the highest quality and performance.
Lifetime Confidence Lifetime Warranty Lifetime warranty on all parts and components. Register your product to activate your warranty.
Built in USA Proudly built in the USA
Exhibit C p. 1 of 11
VOLUME 163
Complaint
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$264.99 iSpring RCTA-C - Built in USA WQA Certified Reverse Sold by 25Shop add to compare
$299.99 iSpring #RCC7AK 6-stage 75 GPD Reverse Osmosis Sold by iSpring Water ...
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Exhibit C p. 2 of 11
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Exhibit C p. 3 of 11
ISPRING WATER SYSTEMS, LLC
Complaint
$269.99 iSpring RCC7P - WQA GOLD SEAL - 5 Stages 75GPD Sold by iSpring Water ...
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$224.24 iSpring MC4-HW14 2.5 Inch x 12 Inch 400GPD Commercial Sold by Factory Adventur ...
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$199.00 iSpring RCC7 5-Stage Residential Under-Sink Reverse Osmosis AAAAA (1) Sold by iSpring Water ...
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$169.99 iSpring CU-A4 - US Legendary - 4-Stage 0.1 Micron Ultra Sold by iSpring Water ...
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$64.39 iSpring FP15X25 5 Micron Sediment Filter Cartridges, NSF Sold by Factory Adventur ...
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Sold by Big Electron LL ...
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Exhibit C p. 4 of 11
$19.99 iSpring LittleWell Faucet Mount Water Filter with Innovative Sold by iSpring Water ...
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Exhibit C p. 5 of 11
VOLUME 163
Complaint
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Exhibit C p. 7 of 11
ISPRING WATER SYSTEMS, LLC
Complaint
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage... https://www.walmart.com/ip/iSpring-RCC7-Built-USA-WQA-Certified...
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iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage 75GPD Under-Sink Water Filter with Brushed Nickel EU Faucet & See-through Housing 2 reviews Q&A By: iSpring Water Systems
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1 of 2 12/9/2016 2:20 PM Exhibit C p. 8 of 11
VOLUME 163
Complaint
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage... http://purewaterfilters.org/product/iSpring-rcc7-built-in-usa-wqa-certified...
Free Water Filters (http://purewaterfilters.org/) Home
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage...
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage RO Under Sink Water Filter with Brushed Nickel Faucet & Tank 5-Stage Housing
$199.00 Price: $179.99 You Save: $19.01 (10%) Availability: In Stock Condition: New Weight: 25.00 LBS Shipping: Calculated at Checkout Quantity:
Add to Cart
WQA GOLD SEAL Tested and Certified by WQA against NSF/ANSI Standard 58 for the reduction of Arsenic, Barium, Cadmium, Chromium, Copper, Fluoride, Lead, Radium 226/228, Selenium and TDS. Tested and Certified by WQA against NSF/ANSI Standard 42 for the reduction of Chlorine Taste and Odor. Tested and Certified by WQA against NSF/ANSI Standard 372 for Lead Free compliance.
The iSpring RCC7 is the best reverse osmosis system for home use. It is a 5-stage, WQA Gold Seal certified under sink water filter. It removes up to 99% of over 1,000 contaminants including lead, chlorine, fluoride, arsenic, asbestos, calcium, sodium, and more. It also features a high capacity 75 GPD RO membrane, a 3.2 gallon pressurized water storage tank, and a lead-free brushed nickel faucet. The system is designed for easy DIY installation and low maintenance. It comes with a 1-year money back guarantee and a 3-year manufacturer's warranty.
Features:
- 5-Stage Reverse Osmosis System - WQA Gold Seal Certified - Removes up to 99% of contaminants - High capacity 75 GPD RO membrane - 3.2 gallon pressurized water storage tank - Lead-free brushed nickel faucet - Easy DIY installation - Low maintenance - 1-year money back guarantee - 3-year manufacturer's warranty
Specifications:
- Model: RCC7 - Stages: 5 - Production: 75 GPD - Tank Size: 3.2 Gallons - Faucet: Brushed Nickel - Dimensions: 14.5" x 5.5" x 17.5"
- Weight: 25 lbs
[illegible]
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage RO Under Sink Water Filter with Brushed Nickel Faucet & Tank 5-Stage Housing
$199.00 Price: $179.99 You Save: $19.01 (10%) Availability: In Stock Condition: New Weight: 25.00 LBS Shipping: Calculated at Checkout Quantity:
Add to Cart
WQA Gold Seal Certified: Tested and Certified by WQA against NSF/ANSI Standard 58 for the reduction of Arsenic, Barium, Cadmium, Chromium, Copper, Fluoride, Lead, Radium 226/228, Selenium and TDS. Tested and Certified by WQA against NSF/ANSI Standard 42 for the reduction of Chlorine Taste and Odor. Tested and Certified by WQA against NSF/ANSI Standard 372 for Lead Free compliance.
The iSpring RCC7 is the best reverse osmosis system for home use. It is a 5-stage, WQA Gold Seal certified under sink water filter. It removes up to 99% of over 1,000 contaminants including lead, chlorine, fluoride, arsenic, asbestos, calcium, sodium, and more. It also features a high capacity 75 GPD RO membrane, a 3.2 gallon pressurized water storage tank, and a lead-free brushed nickel faucet. The system is designed for easy DIY installation and low maintenance. It comes with a 1-year money back guarantee and a 3-year manufacturer's warranty.
Features:
- 5-Stage Reverse Osmosis System - WQA Gold Seal Certified - Removes up to 99% of contaminants - High capacity 75 GPD RO membrane - 3.2 gallon pressurized water storage tank - Lead-free brushed nickel faucet - Easy DIY installation - Low maintenance - 1-year money back guarantee - 3-year manufacturer's warranty
Specifications:
- Model: RCC7 - Stages: 5 - Production: 75 GPD - Tank Size: 3.2 Gallons - Faucet: Brushed Nickel - Dimensions: 14.5" x 5.5" x 17.5"
- Weight: 25 lbs
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1 of 3 12/9/2016 2:22 PM Exhibit C p. 9 of 11
ISPRING WATER SYSTEMS, LLC
Complaint
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage... http://purewaterfilters.org/product/ispring-rcc7-built-in-usa-wqa-certified-...
5-Stage Reverse Osmosis The iSpring RCC7 is the perfect solution for those looking for a high-quality, affordable reverse osmosis system. The RCC7 is the best-selling reverse osmosis system in the US and is the perfect choice for any home. The system is designed to remove up to 99% of contaminants, including lead, chlorine, and other harmful chemicals. The RCC7 is easy to install and comes with a 1-year warranty. The system is also backed by a 30-day money-back guarantee. The RCC7 is the perfect choice for anyone looking for a high-quality, affordable reverse osmosis system.
Product Description The iSpring RCC7 is a 5-stage reverse osmosis system that is designed to remove up to 99% of contaminants from your water. The system is easy to install and comes with a 1-year warranty. The RCC7 is the perfect choice for anyone looking for a high-quality, affordable reverse osmosis system.
Product Details - 5-Stage Reverse Osmosis System - Removes up to 99% of contaminants - Easy to install - 1-year warranty - 30-day money-back guarantee
Technical Details - Brand: iSpring - Model: RCC7 - Part Number: RCC7 - Item Weight: 25 pounds - Product Dimensions: 15 x 8 x 18 inches - Item model number: RCC7 - Size: 5-Stage - Color: White - Style: RCC7 - Material: Plastic - Installation Method: Under Sink - Item Package Quantity: 1 - Number Of Pieces: 1 - Special Features: Removes up to 99% of contaminants - Batteries Included?: No - Batteries Required?: No - Warranty Description: 1-year warranty
2 of 3 12/9/2016 2:22 PM Exhibit C p. 10 of 11
VOLUME 163
Complaint
iSpring RCC7 - Built in USA, WQA Certified Reverse Osmosis 5-Stage... http://purewaterfilters.org/product/ispring-rcc7-built-in-usa-wqa-certified-... 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ISPRING WATER SYSTEMS, LLC 547
Decision and Order
DECISION
The Federal Trade Commission (“Commission”) initiated an investigation of certain acts and practices of the Respondent named in the caption. The Commission’s Bureau of Consumer Protection (“BCP”) prepared and furnished to Respondent a draft Complaint. BCP proposed to present the draft Complaint to the Commission for its consideration. If issued by the Commission, the draft Complaint would charge the Respondent with violation of the Federal Trade Commission Act.
Respondent and BCP thereafter executed an Agreement Containing Consent Order (“Consent Agreement”). The Consent Agreement includes: 1) a statement by Respondent that it neither admits nor denies any of the allegations in the Complaint, except as specifically stated in this Decision and Order, and that only for purposes of this action, it admits the facts necessary to establish jurisdiction; and 2) waivers and other provisions as required by the Commission’s Rules.
The Commission considered the matter and determined that it had reason to believe that Respondent has violated the Federal Trade Commission Act, and that a Complaint should issue stating its charges in that respect. The Commission accepted the executed Consent Agreement and placed it on the public record for a period of 30 days for the receipt and consideration of public comments. The Commission duly considered the comment received from an interested person pursuant to Commission Rule 2.34, 16 C.F.R. § 2.34. Now, in further conformity with the procedure prescribed in Rule 2.34, the Commission issues its Complaint, makes the following Findings, and issues the following Order:
Findings
1. Respondent is a Georgia limited liability company with its principal office or place of business at 3020 Trotters Parkway, Alpharetta, GA 30004.
2. The Commission has jurisdiction over the subject matter of this proceeding and over the Respondent, and the proceeding is in the public interest.
VOLUME 163
Decision and Order
ORDER
Definitions
For purposes of this Order, the following definitions apply:
A. “Clear(ly) and conspicuous(ly)” means that a required disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers, including in all of the following ways:
1. In any communication that is solely visual or solely audible, the disclosure must be made through the same means through which the communication is presented. In any communication made through both visual and audible means, such as a television advertisement, the disclosure must be presented simultaneously in both the visual and audible portions of the communication even if the representation requiring the disclosure (“triggering representation”) is made through only one means.
2. A visual disclosure, by its size, contrast, location, the length of time it appears, and other characteristics, must stand out from any accompanying text or other visual elements so that it is easily noticed, read, and understood.
3. An audible disclosure, including by telephone or streaming video, must be delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand it.
4. In any communication using an interactive electronic medium, such as the Internet or software, the disclosure must be unavoidable.
5. On a product label, the disclosure must be presented on the principal display panel.
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6. The disclosure must use diction and syntax understandable to ordinary consumers and must appear in each language in which the triggering representation appears.
7. The disclosure must comply with these requirements in each medium through which it is received, including all electronic devices and face-to-face communications.
8. The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication.
9. When the representation or sales practice targets a specific audience, such as children, the elderly, or the terminally ill, “ordinary consumers” includes reasonable members of that group.
B. “Made in the United States” shall mean any representation, express or implied, that a product or service, or a specified component thereof, is of U.S.-origin, including, but not limited to, a representation that such product or service is “made,” “manufactured,” “built,” or “produced” in the United States, or any other U.S.-origin claim.
C. “Respondent” means iSpring Water Systems, LLC, also doing business as 123filter.com, and their successors and assigns.
Provisions
I.
PROHIBITED MISREPRESENTATIONS
IT IS ORDERED that Respondent, and Respondent’s officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any water
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filtration system or associated parts and accessories, or any other product or service, must not make any representation, expressly or by implication, that a product or service is Made in the United States unless:
A. The final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States; or
B. A Clear and Conspicuous qualification appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients, and/or processing.
II.
SUBSTANTIATION
IT IS FURTHER ORDERED that Respondent, Respondent's officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with promoting or offering for sale any product or service, shall not make any representation, in any manner, expressly or by implication, regarding the country of origin of any product or service unless the representation is true, not misleading, and at the time it is made, Respondent possesses and relies upon a reasonable basis for the representation.
III.
ACKNOWLEDGMENTS OF THE ORDER
IT IS FURTHER ORDERED that Respondent obtain acknowledgments of receipt of this Order:
A. Respondent, within 10 days after the effective date of this Order, must submit to the Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.
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B. For 20 years after the issuance date of this Order, Respondent must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all employees, agents, and representatives who participate in conduct related to the subject matter of the Order; and (3) any business entity resulting from any change in structure as set forth in the Provision titled Compliance Reports and Notices. Delivery must occur within 10 days after the effective date of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities.
C. From each individual or entity to which Respondent delivered a copy of this Order, Respondent must obtain, within 30 days, a signed and dated acknowledgment of receipt of this Order.
IV.
COMPLIANCE REPORTS AND NOTICES
IT IS FURTHER ORDERED that Respondent make timely submissions to the Commission:
A. One year after the issuance date of this Order, Respondent must submit a compliance report, sworn under penalty of perjury, in which Respondent must: (a) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the Commission, may use to communicate with Respondent; (b) identify all of Respondent’s businesses by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; (c) describe the activities of each business, including the goods and services offered, the means of advertising, marketing, and sales; (d) describe in detail whether and how Respondent is in compliance with each Provision of this Order, including a discussion of all of the changes Respondent made to comply with the Order; and (e) provide a copy of each Acknowledgment of the Order
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obtained pursuant to this Order, unless previously submitted to the Commission.
B. Respondent must submit a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following: (a) any designated point of contact; or (b) the structure of Respondent or any entity that Respondent has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order.
C. Respondent must submit notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against Respondent within 14 days of its filing.
D. Any submission to the Commission required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: ________” and supplying the date, signatory’s full name, title (if applicable), and signature.
E. Unless otherwise directed by a Commission representative in writing, all submissions to the Commission pursuant to this Order must be emailed to [email protected] or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: In re iSpring Water Systems, LLC.
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V.
RECORDKEEPING
IT IS FURTHER ORDERED that Respondent must create certain records for 20 years after the issuance date of the Order, and retain each such record for 5 years, unless otherwise specified below. Specifically, Respondent must create and retain the following records:
A. Accounting records showing the revenues from all goods or services sold;
B. Personnel records showing, for each person providing services in relation to any aspect of the Order, whether as an employee or otherwise, that person's: name; addresses; telephone numbers; job title or position; dates of service; and (if applicable) the reason for termination;
C. Copies or records of all consumer complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response;
D. All records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Commission;
E. A copy of each unique advertisement or other marketing material making a representation subject to this Order; and
F. For 5 years from the date of the last dissemination of any representation covered by this Order:
1. All materials that were relied upon in making the representation; and
2. All evidence in Respondent's possession, custody, or control that contradicts, qualifies, or otherwise calls into question the representation, or the basis
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relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.
VI.
COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for the purpose of monitoring Respondent’s compliance with this Order:
A. Within 10 days of receipt of a written request from a representative of the Commission, Respondent must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury, and produce records for inspection and copying.
B. For matters concerning this Order, representatives of the Commission are authorized to communicate directly with Respondent. Respondent must permit representatives of the Commission to interview anyone affiliated with Respondent who has agreed to such an interview. The interviewee may have counsel present.
C. The Commission may use all other lawful means, including posing through its representatives as consumers, suppliers, or other individuals or entities, to Respondent or any individual or entity affiliated with Respondent, without the necessity of identification or prior notice. Nothing in this Order limits the Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.
VII.
ORDER EFFECTIVE DATES
IT IS FURTHER ORDERED that this Order is final and effective upon the date of its publication on the Commission’s website (ftc.gov) as a final order. This Order will terminate on
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April 6, 2037, or 20 years from the most recent date that the United States or the Commission files a complaint (with or without an accompanying settlement) in federal court alleging any violation of this Order, whichever comes later; *provided, however*, that the filing of such a complaint will not affect the duration of:
A. Any Provision in this Order that terminates in less than 20 years; and
B. This Order if such complaint is filed after the Order has terminated pursuant to this Provision.
*Provided, further*, that if such complaint is dismissed or a federal court rules that the Respondent did not violate any provision of the Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Order will terminate according to this Provision as though the complaint had never been filed, except that the Order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.
By the Commission.
**ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT**
The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from iSpring Water Systems, LLC. (“respondent”).
The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and will
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decide whether it should withdraw from the agreement or make final the agreement’s proposed order.
This matter involves respondent’s marketing, sale, and distribution of water filtration systems and associated parts and accessories with claims that the products are of U.S.-origin. According to the FTC’s complaint, respondent represented that all of its products are “Built in USA.” In fact, in many instances, respondent’s products are wholly imported. In other instances, respondent sources significant inputs to its products from overseas.
The complaint alleges that respondent’s claims that its products are “Built in USA” were false or misleading, or not substantiated at the time the representations were made. Accordingly, the complaint alleges that respondent engaged in deceptive acts or practices in violation of Section 5(a) of the FTC Act.
The proposed consent order contains provisions designed to prevent respondent from engaging in similar acts and practices in the future. Consistent with the FTC’s Enforcement Policy Statement on U.S. Origin Claims, Part I prohibits iSpring from making U.S.-origin claims for its products unless either: (1) the final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States; or (2) a clear and conspicuous qualification appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients, and/or processing.
Part II prohibits respondent from making any “Made in the USA” or other country-of-origin claim about a product or service unless the claim is true, not misleading, and respondent has a reasonable basis substantiating the representation.
Parts III through VI are reporting and compliance provisions. Part III requires respondent to acknowledge receipt of the order, to provide a copy of the order to certain current and future principals, officers, directors, and employees, and to obtain an
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acknowledgement from each such person that they have received a copy of the order. Part IV requires the filing of compliance reports within one year after the order becomes final and within 14 days of any change in respondent that would affect compliance with the order. Part V requires respondent to maintain certain records, including records necessary to demonstrate compliance with the order. Part VI requires respondent to submit additional compliance reports when requested by the Commission and to permit the Commission or its representatives to interview respondent’s personnel.
Finally, Part VII is a “sunset” provision, terminating the order after twenty (20) years, with certain exceptions.
The purpose of this analysis is to aid public comment on the proposed order. It is not intended to constitute an official interpretation of the proposed order or to modify its terms in any way.
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Complaint
IN THE MATTER OF
SPYCHATTER, INC.
CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT
Docket No. C-4614; File No. 162 3251 Complaint, April 12, 2017 – Decision, April 12, 2017
This consent order addresses SpyChatter, Inc.’s representations made to consumers concerning its participation in the Asia-Pacific Economic Cooperation (“APEC”) Cross Border Privacy Rules (“CBPR”) system. The complaint alleges that SpyChatter falsely represented that it was a participant in the APEC CBPR system when, in fact, it never sought or obtained certification. The consent order prohibits SpyChatter from making misrepresentations about its participation in any privacy or security program sponsored by a government or any self-regulatory or standard-setting organization, including, but not limited to, the APEC CBPR system.
Participants
For the Commission: Monique F. Einhorn.
For the Respondent: Alec Harshey, Law Offices of Alec Harshey.
COMPLAINT
The Federal Trade Commission (“Commission” or “FTC”), having reason to believe that SpyChatter, Inc., a corporation, has violated the Federal Trade Commission Act (“FTC Act”), and it appearing to the Commission that this proceeding is in the public interest, alleges:
1. Respondent SpyChatter, Inc. is a California corporation with its principal office or place of business at 601 South Figueroa, Suite 4050, Los Angeles, CA 90017.
2. Respondent markets the SpyChatter app. This app is designed to enable private messaging.