The Federal Trade Commission is cracking down on Florida-based EXOTOUSA LLC d/b/a Old Southern Brass and its owner (collectively, “OSB”) for deceptive claims regarding the origin of its products and its alleged financial donations to military causes. OSB advertised that its products, including glassware, mugs, pens, and other novelty items, were made entirely in the U.S. by displaying statements on its product listings such as “100% American made,” “made right here in the United States of America,” and “100% USA made.” OSB also purported to be veteran-operated and pledged to donate 10% of its sales to military charities. The FTC’s order, finalized in January 2024, found those claims inaccurate, halted the deceptive practices, and imposed a monetary judgment against OSB.
According to the FTC’s complaint, OSB disseminated misleading advertisements, packaging, and promotional materials, including online posts and statements, that falsely portrayed the origin and patriotic associations of its products. Despite OSB’s claim of producing 100% American-made goods, the complaint charged that many of the company’s products were either wholly imported from China or contained a significant portion of imported components. In addition, OSB allegedly misrepresented its affiliation with the U.S. military by falsely asserting that it was veteran-operated and donated a substantial portion of its sales to military service charities. The FTC contended that in reality, OSB had not been operated by a veteran and its charitable contributions amounted to less than .05% of sales.
OSB agreed to the order prohibiting the parties from making false or misleading claims regarding product origin, military affiliation, or charitable contributions. Due to the company’s financial constraints, the Commission agreed to a partial suspension of payment, requiring that OSB only pay $150,000 of the full $4,572,137.66 monetary judgment. The remainder could become immediately due, however, if the Commission learns that the company lied about its financial status.
The order emphasizes the importance of product origin claims, including restrictions on unqualified claims, mandatory disclosures for qualified claims, and specifications for assembly claims. Utilizing the cherished and highly effective “Made in USA” label must be done in conjunction with actual domestic manufacturing. If there is a claim that the product is “made in America,” the product’s significant processing and final assembly must take place in the U.S. and its components must virtually all be made and sourced domestically. If the product does not meet these requirements, a clear disclosure must directly follow the “Made in USA” claim, accurately communicating the extent to which the product incorporates foreign parts, ingredients, components, or processing. When a product claims that it is “assembled in the USA,” there must be significant transformation and primary assembly of the product, as well as substantial involvement in the assembly operation, occurring in the U.S.
The FTC’s action underscores its commitment to holding companies accountable for deceptive practices related to product origin and claims of financial support to charitable causes. The enforcement here comes as a strong warning to companies producing items overseas to steer clear of falsely promoting their products as originating in the U.S. According to the FTC, the order aims to protect consumers by ensuring accurate information about a company’s products and affiliations, emphasizing transparency and truthfulness in marketing and advertising.
For more information on the FTC’s enforcement on “Made in USA” claims please visit:
- The FTC’s Enforcement Policy Statement on U.S. Origin Claims
- The FTC’s Made in USA Labeling Rule (Effective as of August 13, 2021)
Editor: Hans L. Mayer
