The House of Representatives this week passed a bill that aims to restore the Federal Trade Commission’s ability to seek monetary redress in court, after a Supreme Court ruling determined that Congress did not intend to give the regulator that power.
H.R. 2668, the Consumer Protection and Relief Act, was passed in the House by a vote of 221-205 after being introduced by Rep. Tony Cardenas [D-Calif.]. The bill now moves to the Senate for its consideration. It was previously endorsed by the Attorneys General for 28 states — all of them Democrats.
“The passage of the Consumer Protection and Recovery Act today restores the FTC’s ability to ensure that money can be put back in the pockets of defrauded consumers and that bad actors cannot keep illegally obtained profits,” said Rep. Jan Schakowsky [D-Ill.], the chair of the House Energy and Commerce Committee’s Subcommittee on Consumer Protection and Commerce. “Over $3 billion for consumers is at stake in pending cases brought by the Federal Trade Commission. I’d like to thank my good friend and colleague Vice Chair Cárdenas for his leadership on this legislation. I urge my colleagues in the Senate to take up this bill quickly to ensure the FTC can fulfill its critical consumer protection mission and make defrauded consumers whole.”
Earlier this year, 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.
H.R. 2668, 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.