Bed & Bath Faces A $1.3 Million Fine Charged By FTC For Fake Labeling

Bed Bath & Beyond and other retailers are facing a charge of $1,3 million fine charged by the FTC for misleading customer and fake labeling of products.

Bed Bath & Beyond  is being accused by the FTC for advertising some products such as t-shirt, socks, bed sheets, napkins and other items containing bamboo in them. The company received many warning to stop doing this before in 2010. Rayon is not as environmentally friendly as bamboo is, it is said to grow quicker in comparison and has no need for pesticides, according to the FTC. JCPenney has also been accused of the usage of bamboo in its products such as the four pack men’s socks.

Bed Bath & Beyond shoppers have been ‘bamboozled’ the commission says, not just this retail chain customers but Nordstrom, JCPenney and Backcountry.com are also a victim of these allegations. They have to make the civil penalty payment of $1.3 million which is fair considering these businesses must have made a huge profit by misleading customers that the items are made of expensive rayon when they are actually made out of bamboo. The retail chain has broken the law by misleading the customers about textile products.

The director of the FTC consumer protection bureau, Jessica Rich said, “it is misleading to call bamboo that has been chemically processed into rayon simply bamboo. With consumers in the midst of their holiday shopping, it is important for them to know that textiles marketed as environmentally friendly alternatives may not be as green as they were led to believing.” The retailer has to pay the penalty now, as it ignored previous warnings of violating textile product identification act and other FTC terms and conditions.

All the businesses that are facing the penalty were very well aware of what they were doing and what the consequences were but they did it anyway. Bed & bath gave the wrong label to the products and sold them in its stores and another subsidiary buybuy BABY, such as the Bamboo Blend Napkins. JCPenney made sales of various bamboo made items such as Bridgedale Bamboo Crew sock.

The home furnishing retailer will now pay $500,000, JCPenney $290,000, Backcountry.com $150,000 and Nordstrom will be paying $360,000. Furthermore, these organizations will have to change the misleading label and name the products as they really are in the future to avoid any such problems. Such issues arising also put at risk the customers trust and many clients leave as they are not being delivered what is promised to them. The FTC is sending out letters other businesses in the market so that costumers are not deceived again.

Bed Bath & Beyond stock closed at $52.20, after going red by 0.82% on December 14.