DOJ: Walmart and Kohl’s to pay collective $5.5 million in settlement for deceptive advertising
(Gray News) – Walmart and Kohl’s agreed to pay a collective $5.5 million in penalties as part of a settlement related to accusations of deceptive advertising from the companies.
The Department of Justice announced in a release Thursday that Walmart Inc. and Kohl’s Inc. paid $3 million and $2.5 million in civil penalties respectively in the settlement.
The settlement comes after complaints were filed against the two companies accusing them of violating the Federal Trade Commission Act and the Textile Fiber Products Identification Act and its associated rules by making deceptive claims about products that were supposedly made from bamboo.
In filed complaints, the government alleged that Walmart and Kohl’s advertised products as made of bamboo when they were actually made of rayon and did not contain any bamboo fibers.
The complaints also alleged that Walmart and Kohl’s made claims that their bamboo products were environmentally friendly, and that Kohl’s claimed these products were free of harmful chemicals. Rayon is produced using a chemical process that requires toxic chemicals and the emission of pollutants.
The Department of Justice said the companies continued doing so even though both received letters from the FTC in 2010 warning them that the improper advertising of rayon products violated the Textile Rules and FTC Act.
In addition to the penalties, Walmart and Kohl’s are also barred from making misleading or unsubstantiated claims that products are made of bamboo or have environmental benefits because they are derived from bamboo.
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