Kohls and Walmart pay $5.5 million for alleged deceptive mislabeling of rayon as environmentally friendly bamboo

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Posted By: Larry Felton Johnson May 7, 2022

The U.S. Department of Justice announced in a press release that Kohls and Walmart have agreed to a $5.5 million dollar combined settlement for allegedly labeling rayon products as bamboo.

Kohls agreed to pay $2.5 million and Walmart $3 million to settle allegations the companies “violated the Textile Fiber Products Identification Act (Textile Act) and associated rules (Textile Rules) and the Federal Trade Commission Act (FTC Act) by making deceptive claims about products supposedly made of bamboo.”

The Department of Justice and the Federal Trade Commission filed the complaints with the U.S. District Court for the District of Columbia alleging that since 2015 the companies the companies advertised that products were made of bamboo when they were made of rayon and contained no bamboo fibers.

According to the DOJ press release:

The complaints also alleged that Walmart and Kohl’s made deceptive claims that their products supposedly made of bamboo were environmentally friendly, and that Kohl’s further claimed such products were produced free of harmful chemicals, when in fact rayon is produced using a chemical process that requires toxic chemicals and results in the emission of hazardous pollutants. Kohl’s and Walmart did so even though, in 2010, both had received letters from the FTC warning them that improperly advertising products made of rayon as bamboo violated the Textile Rules and FTC Act.

“Consumers should be able to trust retailers’ representations about the materials from which their clothes and linens are made,” said Deputy Assistant Attorney General Arun G. Rao, head of the Justice Department’s Consumer Protection Branch. “The Department of Justice will not tolerate companies that generate sales by making false claims about their textile products.”

“Kohl’s and Walmart are paying millions of dollars under the FTC’s Penalty Offense Authority for mislabeling their rayon products as bamboo,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “False environmental claims harm both consumers and honest businesses, and companies that greenwash can expect to pay a price.”

Walmart’s total revenue was $152.9 billion last year. Kohls’ total revenue was $6.5 billion.