Business ProfileforWovenly

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

October 8, 2021, The following describes a settlement that has been formally brought by a government agency. The Federal Trade Commission, alleges and charges as follows:

Resident Home LLC and owner Ran Reske, will pay $753,000 to settle FTC charges that they made false, misleading, or unsupported advertising claims that their imported DreamCloud mattresses were made from 100% USA-made materials.

Resident Home LLC is the parent of Nectar Brand LLC (better known as Nectar Sleep), a company that had previously agreed to a 2018 FTC administrative order resolving allegations that it falsely advertised imported mattresses as "Assembled in USA." Following the 2018 order, Reske, under penalty of perjury, stated that Resident had never made U.S.-origin claims about its DreamCloud mattress. This proved to be untrue. The proposed order entered into today incorporates the terms of the 2018 order, orders the payment of $753,000, and expands the application of the 2018 order to all the entities under the control of Reske.

"Baseless claims that products are made in the USA hurt not only consumers but also honest businesses that build their products here," said Samuel Levine, Director of the Bureau of Consumer Protection. "Unfortunately, we see too many repeat offenders like Resident Home, but thanks to the FTC's recently finalized Made in USA Labeling Rule, companies that abuse these labels will face civil penalties in addition to other relief. We will not hesitate to seek strong penalties against Made in USA fraud."

In the company's promotional material, Resident Home LLC and Reske claimed that their DreamCloud mattresses were "proudly made with 100 percent USA-made premium quality materials." But, according to the complaint, these repeat claims were false or misleading, and violated the FTC Act. The FTC says all DreamCloud mattresses are finished overseas and, in some cases, are wholly imported or use significant imported materials.

Under the terms of the proposed order, Resident Home LLC and Reske are prohibited from making several claims that deceive consumers and harm law-abiding businesses whose sales were siphoned because of this behavior. The order specifically covers unqualified U.S.-origin claims (claims made with no limitations) for any product - unless they can show that: the product's final assembly, final processing, and all significant processing takes place in the United States; and all or virtually all ingredients or components of the product are made and sourced in the United States.

The order also governs any qualified Made in USA claims (claims that include explanatory information). For qualified claims, Resident Home LLC and Reske must include a clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing. If they want to say a product is assembled in the United States, they must ensure that it is last substantially transformed in the United States, that its principal assembly takes place in the United States, and that United States assembly operations are substantial. Finally, the order requires Resident Home LLC and Reske to notify affected consumers about the FTC's order and submit compliance reports.

To access the full Federal Trade Commission press release, please visit: https://www.ftc.gov/news-events/press-releases/2021/10/ftc-orders-made-usa-repeat-offender-pay-funds