On April 18, 2023, the Federal Trade Commission (FTC) announced a complaint against Cycra, a motorcycle plastics manufacturer, about false Made in America claims.
The Made in USA Labeling Rule (MUSA Label) was implemented in August 2021. It prohibits businesses from labeling products as Made in the USA if they are not. Violating the MUSA Label Rule is, in effect, a violation of the Federal Trade Commission Act, which seeks to prevent unfair competition and deception affecting commerce. The effect of this is the issuance of a monetary fine and, at times, consumer refunds.
Cycra was founded over 20 years ago to produce racing plastics for motocross. “Racing plastics” refers to the molded plastic parts covering motorcycle engines for protection and airflow. The company also manufactures handguards and rider protective gear. They outfit professional teams like Honda, Yamaha, Suzuki, Kawasaki, and more. According to Cycra, since 2015, they have produced their products out of Lexington, North Carolina.
Yet this is exactly where the problem was found. As it turns out, Cycra products have not been manufactured in North Carolina since 2015. In fact, they haven’t even been manufactured in America.
Investigating Cycra’s Made in USA Claim
For years, Cycra has been brandishing website banners, “Proudly designed, developed, and manufactured in Lexington, North Carolina,” and stamping their product boxes with the same. Cycra advertised and promoted its products under the American flag. They operated under the guise that all, or virtually all, of their products were USA-made.
However, the FTC found that from 2019 up until May 31, 2022, products sold by Cycra that were marketed as Made in the USA were, in fact, not. They found that the company received over 30 shipments imported from Asia and Europe between March 2019 and August 2022. Cycra imported a significant amount of parts to assemble products and completely finished products from outside the US. Despite these practices, they never changed their labeling.
The FTC Complaint
In their complaint, the FTC specifically names the serving CEO, Steven Chadwick James, as being complicit in the knowledge of deceiving Cycra consumers. James was found to have directly lied during his correspondence with the US Customs and Border Protection (CBP) about appropriate product labeling.
On at least two occasions, Cycra received notices from the CBP that their product labeling was inaccurate. Yet, they did not act to correct their marketing. For their violations, the FTC has fined Cycra in the amount of $872,577. It is with full knowledge that the company defrauded its customers about product origins. For these grievances, Cycra not only owes a hefty sum, but they also are ordered to notify purchasers and are subject to compliance monitoring for the next 20 years.
It’s one thing to be proud that your products are made in the USA…but it’s another curiosity entirely when that statement doesn’t hold true. It might be a righteous recommendation that companies violating Made in USA labeling rules change their marketing slogans to “embarrassingly not made in the USA.”