FTC Asks Congress For Power To Seek Restititution From Fraudsters

Acting Federal Trade Commission chair Rebecca Kelly Slaughter on Tuesday urged Congress to overturn a recent Supreme Court decision that made it more difficult for the agency to obtain restitution from fraudsters.

“If Congress does not act promptly, the FTC will be far less effective in its ability to protect consumers and execute its law enforcement mission,” Slaughter said in her prepared testimony to the House Energy and Commerce Consumer Protection subcommittee. “We respectfully request that Congress act to ... revive the FTC’s ability to enjoin illegal conduct and return to consumers money they have lost.”

Slaughter's testimony to lawmakers comes several days after the Supreme Court ruled that the FTC can't ask a federal judge to order a company to disgorge wrongly obtained funds, without first jumping through time-consuming, administrative hoops.



Specifically, the Supreme Court unanimously ruled that Section 13(b) of the FTC Act -- which the agency has often relied on to request restitution and disgorgement -- doesn't empower the agency to seek monetary relief.

Slaughter told Congress that the FTC has relied on Section 13(b) to obtain “billions of dollars” of restitution in a broad array of cases -- including data security and privacy, and scams targeting seniors and veterans.

“More recently, in the wake of the pandemic, the FTC has used Section 13(b) to take action against entities operating COVID-related scams,” Slaughter stated in her testimony.

Last week, Rep. Tony Cardenas (D-California) introduced the Consumer Protection and Relief Act (HR 2668), which would revise Section 13(b) to expressly empower the FTC to obtain restitution.

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