The U.S. Federal Trade Commission is penalizing a company for falsely claiming that certain products were manufactured in the U.S, and that the company was veteran-operated and donated 10 percent of its sales to military service charities.
The FTC’s “Made in USA” rule, which took effect in August 2021, prohibits marketers from labeling products as “Made in USA” unless (1) the final assembly or processing, and all significant processing that goes into the products, occur in the U.S. and (2) all or virtually all ingredients or components of the products are made and sourced in the U.S. The rule also requires all “Made in USA” labels appearing in mail order catalogs to be truthful and non-misleading.
The FTC’s complaint against the company, first announced in December 2023, said that the company made numerous claims that its products were “Made in USA,” but many of the company’s products were wholly imported from China or contained significant imported content. The company falsely claimed various forms of affiliation with the U.S. military, including being veteran-operated and contributing a portion of proceeds to military charity groups. The final order requires the company to pay $150,000 to the FTC, stop making false claims, and comply with specific requirements relating to future country-of-origin claims. The order also includes a monetary judgment of $4,572,137.66, which is partially suspended based on the defendants’ inability to pay the full amount.
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