Press Release: 2021-07-21

House Votes to Restore FTC’s Authority to Seek Monetary Relief for Harmed Consumers

House Votes to Restore FTC’s Authority to Seek Monetary Relief for Harmed Consumers:

Washington, July 20, 2021

LOWELL, MA – Today, Congresswoman Lori Trahan (MA-03), a member of the House Energy and Commerce Committee’s Consumer Protection and Commerce Subcommittee, voted for passage of H.R. 2668, the Consumer Protection and Recovery Act, legislation she cosponsored to restore the Federal Trade Commission’s (FTC) authority to go to court to get victimized customers and businesses the money they were scammed out of.

“The Federal Trade Commission’s ability to seek monetary relief is critical for harmed consumers who have been defrauded, and it’s also one of the Commission’s strongest tools to deter future predatory behavior,” said Congresswoman Trahan. “Today’s vote gets us one step closer to overturning the Supreme Court’s decision that only stands to benefit corporate bad actors at the cost of everyday consumers. I’m proud to support this legislation to restore the FTC’s consumer protection powers, and it’s imperative that the Senate act urgently to do the same.”

Over the last forty plus years, the FTC has used section 13(b) of the Federal Trade Commission Act to return money taken by scammers, fraudsters, and other lawbreakers to consumers. In Massachusetts, the Commission has used its 13(b) authority to provide more than 100,000 consumers with a total of $18,082,017 – nearly $2 million of which was from the Herbalife settlement alone – in refunds for fraudulent products within the last three years alone.

Yet, earlier this year, the Supreme Court ruled that section 13(b) is limited to stopping or mandating certain conduct but does not allow the FTC to seek monetary relief from bad actors for the people or organizations they defrauded – effectively stopping financial relief for consumers immediately. Despite being the nation’s primary consumer protection agency, this decision has stripped the FTC of its single greatest tool to help consumers and deter fraud.

The Consumer Protection and Recovery Act amends section 13(b) to restore the FTC’s express authority to seek monetary relief for consumers in court for all violations of law the FTC enforces. H.R. 2668 also explicitly states that the FTC may pursue many kinds of equitable relief for consumers, including restitution for losses, contract reformation and rescission, monetary refunds, and the refund of property, as well as forcing bad actors to return their illicitly obtained gains.

Restoring the FTC’s consumer protection powers is especially important as the nation emerges from the COVID-19 pandemic, which has given rise to a sharp increase in scams and fraud that prey on consumers’ fears and financial insecurities.

H.R. 2668 is supported by a diverse coalition of groups, including bipartisan Attorneys General for 28 states, consumer advocacy organizations, veteran groups, and more. The legislation now moves to the Senate for consideration.