Consumers notice and are more likely to buy products that are marketed as Made in USA, but companies face significant legal risk, negative publicity, and decades of government oversight if they overstate the extent to which their products are made in the United States.

  • Companies marketing their products without qualification as Made in USA must at least meet the “all or virtually all” standard, meaning that all significant parts and processing that go into the product are of U.S. origin.
  • Federal, state, self-regulatory, and private actors are increasingly bringing enforcement actions and other litigation for false or misleading use of Made in USA labels.

This update from September outlines the FTC’s enforcement policy on U.S.-origin claims and analyzes recent actions challenging such false or misleading claims. Read the full Update here.

Takeaways:

  1. Support any comparative claims and clearly disclose the basis of the comparison.
  2. Be specific about claims regarding products or components made in the United States.

Last month, the National Advertising Division (NAD), a self-regulatory body, recommended that Telebrands, Corp., discontinue certain advertising claims for the company’s Atomic Beam flashlight, including claims comparing its brightness and durability, associating it with the U.S. military, and identifying its components as made in the United States.

NAD recommended, among other things, that Telebrands discontinue its claims that the Atomic Beam is “40 times brighter” and more durable than ordinary flashlights and provides features (such as strobe or zoom) that ordinary flashlights do not provide because the company did not submit evidence showing a superior brightness over such “ordinary” or “regular” flashlights or that the “tactical” features of its flashlights were not available on other flashlights.

In response to the challenge from Energizer Brands LLC alleging that the advertising also created the false impression that the Atomic Beam was endorsed by or associated with the U.S. military, Telebrands changed the name of the product to “Atomic Beam” from “Atomic Beam USA” and removed a statement in a commercial that the Atomic Beam uses “U.S. Special Forces Tactical Technology” while displayed with an action shot of military commandos.

NAD also recommended that the company discontinue its claim that the “critical components” in the flashlights are “made right here in the USA” but confirmed that the company could make truthful and qualified claims that specific parts are made in the United States.

See NAD’s press release for more information about these and other claims about the Atomic Beam flashlight.

 

Takeaways:

  1. Health-related advertising claims must be supported by competent and reliable scientific evidence, generally consisting of human clinical trials that are methodologically sound and statistically significant to the 95% confidence level.
  2. Advertising claims must be clearly expressed as ingredient claims if the substantiation addresses only the efficacy of the ingredients in the product, not the product itself.

Continue Reading National Advertising Division Recommends that VH Nutrition Discontinue Claims for TriDrive Supplement Marketed to Athletes

Takeaways:

  1. Regulators continue to emphasize that relative comparisons in advertising must be supported by fact-based evidence.
  2. Each claim in an advertisement remains subject to review by the National Advertising Division.

Continue Reading National Advertising Division Recommends that Maker of Reusable Storage Bags Discontinue Unsupported Comparative Advertising Claims

The Federal Trade Commission (FTC) and the State of Maine recently delivered yet another “gut check” to businesses engaging in weight loss advertising, Map of Maineobtaining a $2 million dollar settlement against an advertising agency related to allegedly false claims. While challenges related to weight loss claims and related offers are all too familiar for brands, this settlement serves as a heavy reminder to ad agencies that they can also be held responsible for false advertising.

In its complaint against Marketing Architects Inc. (MAI), the FTC and Maine alleged that radio ads created and disseminated by MAI for its client, Direct Alternatives (the maker of Puranol, Pur-Hoodia Plus, PH Plus, Acai Fresh, AF Plus, and Final Trim) made a number of (1) false or unsubstantiated  weight loss claims; (2) false or inadequately-disclosed “free trial” claims; and (3) false testimonials or ads disguised as testimonials. Continue Reading Agency Beware: False Advertising Liability Applies to Agencies Too