WASHINGTON, D.C. –Today, U.S. Senator Maria Cantwell (D-WA), the Ranking Member of the Senate Committee on Commerce, Science, and Transportation, hailed the passage of the COVID-19 Consumer Protection Act. This bill will give the Federal Trade Commission (FTC) new authority to seek civil penalties for scams and deceptive practices related to the COVID-19 pandemic. With the distribution of the vaccine, the potential for future government assistance, and a health crisis that continues to grow, vulnerable consumers remain prime targets for COVID scams. Congresswoman Jan Schakowsky (D-IL), Chair of the House Energy and Commerce Committee’s Consumer Protection and Commerce Subcommittee, led the House version of the bill.
“I am pleased that we were able to, working with Senator Wicker, include language that gives the Federal Trade Commission new authority to seek civil penalties for scams and deceptive practices related to the COVID pandemic,” Ranking Member Cantwell said on the Senate floor last night. “Now, the FTC will be able to go after and find these people on first time offenses.”
“Some of our most vulnerable fellow Americans have been the targets of increased fraud and scams during the COVID-19 pandemic. They exploit fear or confusion during crises and emergencies and count on their victims being too embarrassed to report scams to the relevant authorities,” said Congresswoman Jan Schakowsky. “We urgently need a better understanding of fraud targeting American consumers and this legislation will allow the FTC to tackle these problems. The rise of fraud and scams in this time of national emergency makes it vital that we take action immediately.”
During a hearing on August 5 of this year, Ranking Member Cantwell criticized the FTC for relying too heavily on issuing warning letters to consumers about possible COVID scams, rather than taking action to obtain refunds for consumers. She said, “The COVID-19 pandemic has attracted bad actors and scam artists, including those who take advantage of people's fear and dire circumstances. While many of the attorneys general have gone after these profiteers, I believe the FTC is holding back. You could be doing more. We must move beyond warnings and threats in response to these unconscionable scams. We must see the FTC exercising real enforcement with real consequences to protect consumers and families when they are most vulnerable.”
With new vaccines being distributed, state and federal regulators are warning consumers about scams claiming someone can pay for early access for a vaccination. The FTC reports that in Washington state, consumers have been scammed out of nearly $5 million dollars since the pandemic began. These scams can range from straightforward identity theft—made easier by the explosion of online shopping during quarantine—to more involved and pernicious schemes promising phony treatments or cures for the virus. In May, the Seattle Times reported that Washington state lost hundreds of millions of dollars to an international fraud scheme relating to unemployment.
The COVID-19 Consumer Protection Act will:
- Allow the FTC to obtain first-time civil penalties for scams and fraudulent behavior related to COVID-19;
- Cover deceptive statements related to: the treatment, cure, prevention, mitigation, or means of diagnosis of COVID-19; and any government benefits associated with COVID-19 relief;
- Work in parallel to 50 state laws prohibiting deceptive practices; and
- Provide the FTC authority for the duration of the COVID-19 public health emergency.
Here’s what consumer protection experts have to say about the COVID-19 Consumer Protection Act:
Anna Laitin, Director, Financial Fairness and Legislative Strategy, Consumer Reports: “The pandemic has ushered in a new wave of fraudulent schemes by scam artists eager to take advantage of people's financial vulnerabilities and fears about the coronavirus. This bill will strengthen the FTC's authority and give it the tools it needs to go after crooks who are exploiting the COVID crisis to rip off consumers.”
Ed Mierzwinski, Senior Director, Federal Consumer Programs, U.S. PIRG: “This year, the FTC has sent hundreds of warning letters to companies regarding deceptive claims about COVID-19 products. It would be a far more effective deterrent to wrongdoing to impose civil penalties, not warnings, as the “COVID–19 Consumer Protection Act” would provide.”
Susan Grant, Director of Consumer Protection and Privacy, Consumer Federation of America: “Consumer Federation of America strongly supports the COVID-19 Consumer Protection Act because it’s essential for the Federal Trade Commission to have the tools it needs to stop scammers from taking advantage of people’s fears of the pandemic and hopes for help.”
Sally Greenberg, Executive Director, National Consumers League: “The National Consumers League supports critically important legislation that would give the Federal Trade Commission the authority to impose strong civil penalties for COVID-deceptions. We’ve seen an onslaught of fraudsters trying to trick businesses and consumers into believing they are offering loans and advice on behalf of the government. The FTC can’t properly police this activity without meaningful penalties - this bill would give them that power and is much needed.”
Ranking Member Cantwell has repeatedly called for a stronger FTC. Cantwell has also long been a leading advocate for privacy and data security. In November of 2019, she unveiled the Consumer Online Privacy Rights Act, comprehensive federal online privacy legislation to establish privacy rights, outlaw harmful and deceptive practices, and improve data security safeguards for American consumers. She has demanded comprehensive privacy protections. She has also championed the importance of investing in cybersecurity measures throughout the U.S. economy and pushed federal agencies like the FTC to take a more robust role in protecting Americans from privacy threats.