Congress Seeks to Restore Power to FTC Taken Away by Supreme Court

Democrats in Congress are moving fast to restore the Federal Trade Commission’s ability to seek monetary redress in court, following a unanimous Supreme Court ruling last week that determined Congress did not intend to give the regulator the power to seek injunctions.

H.R.2668, the Consumer Protection and Relief Act, was introduced last week by Rep. Tony Cardenas [D-Calif.], the vice chair of the House Committee on Energy and Commerce’s Consumer Protection and Commerce Subcommittee. The bill, which was cosponsored all 13 House Democrats on the subcommittee, seeks to amend Section 13(b) of the FTC Act to make the FTC’s authority “explicit” to obtain injunctive and equitable relief, including monetary redress for consumers. That equitable relief can come in many different forms, including restitution for losses, contract reformation and recission, monetary refunds, and the refund of property, as well as forcing bad actors to return their ill-gotten gains.

“For decades, the Federal Trade Commission has protected consumers by seizing and returning stolen money to victims of fraud,” said Rep. Cardenas, in a statement. The “Supreme Court decision guts that authority to the benefit of scammers and criminals everywhere. That is why it is vital to pass the Consumer Protection and Relief Act, which will restore the agency’s authority and provide relief for victims of fraud and scams. We look forward to working with all our colleagues on this critical legislation to get money back in the pockets of hard-working Americans.”

The subcommittee has also scheduled a hearing for tomorrow, “The Consumer Protection and Recovery Act: Returning Money to Defrauded Consumers,” which can be watched via livestream here.

Last week, the Supreme Court issued its ruling in AMG Capital Management v. Federal Trade Commission, ruling that Section 13(b) of the FTC Act “does not authorize the Commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement” for individuals. The FTC had used that section to assess billions of dollars in fines and penalties related to deceptive business practices against the companies it regulates. Section 13(b) does allow for permanent injunctions against individuals or organizations, it does not specifically allow for restitution to be levied.

The FTC has asked Congress to make the necessary amendments to allow it to use Section 13(b) to seek restitution. “The Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” said Acting FTC Chairwoman Rebecca Slaughter, in a statement. “We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”

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