Promo Company Reaches Six-Figure Settlement With FTC Over False 'Made in USA' Claims
Akin Kurji, owner and president of Gennex Media, dba Brandnex, has reached a settlement with the FTC after he and his company falsely claimed online that their products were made in the U.S. According to an FTC release, Kurji and Gennex will pay $146,249.24.
If the names sound familiar here, it's because Kurji and his company were also part of an ongoing price fixing case that started in 2017. Kurji pleaded guilty in 2019, and faced a maximum prison sentence of 10 years and $1 million fine. Other companies involved in the price fixing scheme, such as Zapaaz and Custom Wristbands, were forced to pay $1.9 million and $409,000, respectively.
The complaint against Kurji and Gennex alleged that they have been violating the FTC Act by advertising U.S.-made products on Brandnex’s website and social media pages, when “numerous” products were actually imported from China.
According to Lexology, this included products such as wristbands, temporary tattoos, buttons and lanyards that, in some cases, Gennex shipped directly from China to consumers, without ever stopping at a Gennex facility in the U.S.
“This should be obvious, but you can’t say your products are made in the USA when most of them are made elsewhere,” Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection, said in a statement. “When companies like Gennex make this false claim, they hurt both people who want to buy American and companies that really do make things here.”
The FTC requires businesses to prove that a product’s final assembly or processing, as well as all “significant processing,” takes place in the U.S., and that “virtually all ingredients or components of the product” are sourced or made in the U.S., for a company to advertise that its products are made in the U.S.
The FTC’s order will prohibit Gennex and Kurji from making any claims about their products’ country of origin, “unless the claim is not misleading and they have a reasonable basis that substantiates their claim.” They will also need to provide compliance reports.