FTC penalizes parent company of Nectar Sleep over false “Made in USA” ads

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Nectar Sleep- nectar mattresses
Image source: Nectar Sleep website

The Federal Trade Commission (FTC) imposed a penalty against Resident Home LLC,  its owner Ran Reske for making false, misleading, or unsupported “Made in USA advertisements.

Resident Home LLC is the parent company of Nectar Brand LLC better known as Nectar Sleep. The company is also doing business as DreamCloud Sleep, Awara Sleep, Level Sleep, Bundle Living, 1771 Living, Cloverlane, Wovenly Rugs, Sleep
Authority, and Home Well Designed.

According to the FTC, Resident Home and Reske are repeat offenders. In 2018, the defendants settled the Commission’s complaint alleging they falsely advertised that their mattresses were “Designed and Assembled in USA.” In reality, their DreamCloud mattresses are wholly imported from China.

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Under the 2018 settlement, the defendants were prohibited from making unqualified Made in USA claims for mattresses, other products, or services. The Commission prohibited Nectar Brand, its officers, and other company representatives from making false, or unsubstantiated country-of-origin claims in their marketing materials regarding any product or service.

Nectar Sleep parent company and its owner to pay a $753,300 fine

On Friday, the FTC said its current Order requires the defendants to pay a civil penalty of $753,300. It also included the terms of the 2018 order and expanded the application to Nectar Sleep and all the entities controlled by Reske.

In a statement, FTC Bureau of Consumer Protection Director Samuel Levine said, “Baseless claims that products are made in the USA hurt not only consumers but also honest businesses that build their products here. Unfortunately, we see too many repeat offenders like Resident Home.”

Levine added that the FTC recently finalized the Made in USA Labeling Rule, which imposes civil penalties and other reliefs against companies that violate it. He said. “We will not hesitate to seek strong penalties against Made in USA fraud.”

In a statement, FTC Commissioner Rohit Chopra said, Wow, that was fast. Soon after the Federal Trade Commission “punished” Nectar Sleep through a no-money, no-fault order, the company and its affiliates clearly realized the FTC wasn’t serious
about Made in USA fraud, so here we are again.”

In addition, Commissioner Chopra stated, “FTC orders are not suggestions, but many bad actors view them as such. And when companies do not adhere to agency orders, it is often a sign of more serious problems. Violations of FTC orders are punishable with civil penalties and a broad range of other relief.”

“The proposed settlement binds Nectar Sleep, as well as its new parent company…requires the companies to provide notice to consumers who purchased a mattress while the false claims appeared,” Commissioner Chopra further stated.

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