2021 SCOTUS decision gutted FTC “13(b)” authority which returned $11.2B to victims during prior 5 years
Commerce Committee Report punctuates urgency for Congress to act
WASHINGTON, D.C. – U.S. Senator Maria Cantwell, (D-Wash.), Chair of the Committee on Commerce, Science, and Transportation, and Senators Ben Ray Luján (D-N.M.), Chair of the Subcommittee on Communications, Media, and Broadband, Amy Klobuchar (D-Minn.) and Rev. Raphael Warnock (D-Ga.) introduced legislation to restore the Federal Trade Commission’s (FTC) decades-long authority to return money to consumers victimized by illegal scams, fraud and other unfair or deceptive practices. In April 2021, the Supreme Court slashed the FTC’s “Section 13(b)” authority which the commission utilized to return $11.2 billion dollars to consumers in the five years prior to the decision.
“For decades, the FTC used this authority to return billions of dollars owed to consumers and small businesses who were scammed, swindled, deceived, or locked out of competitive marketplaces,” said Sen. Cantwell. “Our bill restores that power so the commission can get back to its work on behalf of victims in securing redress from the bad actors who deceived them.”
"One of the FTC's primary responsibilities is defending consumers from predatory scams and fraud," said Sen. Luján. "It is high-time that Congress reinstate the FTC's authority to return billions of dollars to victims of unfair and deceptive practices. That’s why I'm proud to join Senators Cantwell, Klobuchar, and Warnock in introducing this legislation. I won't stand by as New Mexican families and small businesses get ripped off."
The Consumer Protection Remedies Act of 2022 fully restores the FTC’s ability to obtain monetary and other relief for consumers under Section 13(b) of the FTC Act by going directly to federal court. The legislation:
Protects consumers and fosters a fair marketplace by:
- Allowing the FTC to go to court and ask the judge to order scammers and law breakers to return the money they unlawfully took from consumers and give up their ill-gotten gains so that it is not profitable to break the law.
- Permitting the FTC to go to court to seek monetary remedies for consumers who were harmed because of anticompetitive conduct, in addition to unfair and deceptive or other unlawful conduct.
- Confirming that the FTC may sue for injunctions and consumer redress for prior conduct, not just ongoing conduct, to stop law breakers from reverting back to their unlawful conduct.
Affirms 13(b)’s due process protections with impartial court-ordered redress 13(b) by:
- Ensuring that the FTC must argue its case in front of a neutral federal judge, with opportunity to appeal contested decisions through the federal judiciary.
- Requiring that refunds or other relief be “in the public interest,” as determined by the judge.
Earlier this week, the Commerce Committee released a report outlining the implications of the Supreme Court’s April 2021 decision in AMG Capital Management LLC v. FTC that gutted the commission’s enforcement authority under Section 13(b) of the FTC Act. For more than 40 years, the FTC relied on this enforcement power to refund money illegally taken from consumers and small business owners through unlawful and unfair business practices including telemarketing fraud, pyramid schemes, and data security and privacy scams. It had been especially critical in cases involving technology and pharmaceutical companies including Amazon, Uber, AT&T, Teva and Tracfone, which returned millions of dollars to victims of illegal conduct. Immediately following the Supreme Court action, even FTC cases that had been decided in favor of consumers were halted, allowing corporations to keep hundreds of millions of dollars in redress owed to victims.
During the COVID-19 pandemic, consumer complaints to the FTC of fraud, identity theft and deceptive practices skyrocketed as scammers peddled offers of fake cures, counterfeit masks and bogus opportunities to earn money working from home. In 2020, consumer complaints rose more than 45% over 2019. Complaints continued to grow in 2021, and reported losses hit a record $5.9 million.
View the Consumer Protection Remedies Act of 2022 legislation here.