Commerce Committee Report Underscores Need for Congress to Restore FTC Authority to Return Billions to Consumers Ripped off by Scams, Fraud, Deception
May 2, 2022
Sen. Cantwell to introduce legislation this week
2021 SCOTUS decision gutted FTC “13(b)” authority which returned $11.2B to victims during prior 5 years
Report: “Decades of precedent have been overturned, denying consumers billions in refunds, creating loopholes for fraudsters, and weakening oversight of Big Tech and Pharma”
U.S. Senator Maria Cantwell, (D-Wash.), Chair of the Committee on Commerce, Science, and Transportation, released a new Committee report which validates the urgency for Congress 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 had been utilized in cases resulting in the return of $11.2 billion dollars to consumers in the five years prior to the decision.
“This report makes very clear what’s at stake for consumers if Congress fails to act,” said Sen. Cantwell. “If the FTC remains disarmed of this critical authority, millions of consumers and small businesses who’ve been scammed, swindled, or locked out of competitive marketplaces will never be made whole.”
The report highlights the implications of the Supreme Court’s April 2021 decision in AMG Capital Management LLC v. FTC that gutted the FTC’s enforcement authority under Section 13(b) of the FTC Act. For more than 40 years, the Commission had relied on this authority to go to federal court to refund billions of dollars illegally taken from consumers and small business owners through unfair and deceptive acts including telemarketing fraud, unfair or anticompetitive practices, data security and privacy scams.
Before the Supreme Court’s decision, the FTC’s 13(b) enforcement authority had been especially critical in addressing Big Tech and Pharma’s ability to harm consumers and fledgling businesses. The report outlines a series of successful FTC cases against 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.
“The loss of the FTC’s 13(b) authority is hitting the pocketbooks of consumers today,” said Sen. Cantwell. “Consumers will not see $493 million in refunds a Federal trial court ordered pharma companies AbbieVie and Besins Healthcare to pay as a result of their scheme to keep lower-priced generic versions of AndroGel off the markets. As a result, consumers paid hundreds of millions more for an expensive brand-name drug, instead of generic drugs. Now, instead of giving the money back to consumers, AbbVie and Besins will get to keep the money.”
“This is unconscionable,” Sen. Cantwell added. “Congress can act to stop this from happening in the future and restore this vital authority to the FTC so it can help return money back to consumers’ pockets.”
Sen. Cantwell will introduce legislation this week that would fully restore the FTC’s ability under Section 13(b) to allow the FTC to sue scammers and other bad actors in federal court to return the money they took from consumers as well as disgorgement of ill-gotten gains. The legislation would: authorize monetary remedies for consumers who were harmed by consumer protection violations; ensure that the FTC may sue for injunctions and consumer redress for prior conduct; affirm that the FTC must argue its cases in front of a neutral federal judge, with full due process and opportunity to appeal; and create a statute of limitations of 10 years on FTC suits.
FTC data shows increasing number of consumer fraud reports and skyrocketing cost to victims
The report also details, state-by-state, the enormous value the FTC’s enforcement authority under 13(b) has brought to consumers across the country.
Sen. Cantwell has a long history of protecting American consumers by strengthening the FTC.
- Chair Cantwell’s COVID-19 Consumer Protection Act, which was enacted last Congress, authorized the FTC to obtain first-time civil penalties against those peddling fake COVID-19 cures or treatments, or engaging in COVID-19 benefits fraud.
- Chair Cantwell acted to secure $30.4 million for the FTC in the American Rescue Plan of 2021.
- Chair Cantwell’s Consumer Online Privacy Rights Act, S. 3195, which was introduced last November, would create a new bureau within the FTC to enforce the privacy rights and obligations created in the bill.
View the Committee report here. View the report state-by-state section here.