Acting FTC President Rebecca Slaughter testifies at House Commerce Committee on FTC § 13 (b) Authority – Consumer Protection
United States: Acting FTC President Rebecca Slaughter testifies at House Commerce Committee on FTC § 13 (b) authority
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On April 27, 2021, the House Energy and Commerce Committee held a hearing titled “Consumer Protection and Recovery Act: Returning Money to Defrauded Consumers”. This hearing took place five days after the United States Supreme Court ruled that Section 13 (b) of the Federal Trade Commission Act (the “Act”) did not authorize the FTC to claim or to a court grant fair pecuniary compensation such as restitution. or disgorging. Following the court ruling, US representative Tony Cárdenas introduced HR 2688 (“Consumer Protection and Recovery Act”). If enacted, the Consumer Protection and Recovery Act would amend section 13 (b) to expressly give the FTC the power to seek and a court to grant fair monetary relief. During the hearing, Acting FTC President Rebecca Kelly Slaughter presented testimony urging members of the House to support and ratify the Consumer Protection and Recovery Act.
The Future of FTC § 13 (b) Authority
While members of the House do not agree on the extent of authority the FTC should be granted under section 13 (b) of the act, each member – whether a Democrat or Republican – generally acknowledged that the power of the FTC to seek financial restitution from U.S. consumers is one of the federal agency’s primary responsibilities.
- Acting President Slaughter urged Congress to pass the Consumer Protection and Recovery Act. Over the past five years, the FTC has returned funds totaling $ 11.2 billion to defrauded consumers. Further, without Section 13 (b) permission, President Slaughter has suggested that the FTC will struggle to win in court. Currently, the FTC has 24 pending federal court cases that rely exclusively on Section 13 (b) for a monetary remedy. President Slaughter noted that these cases represent a total of $ 2.4 billion in funds that the FTC will not be able to recover and return to consumers due to the United States Supreme Court’s limitation of its authority under Article 13 (b). Nonetheless, Section 5 (l) of the law remains unscathed and it allows the FTC to seek “civil penalties” and “fair action” against defendants who violate the FTC’s final cease and desist orders.
- Representative Frank Pallone noted that “[t]there are no adequate substitutes in the current law that can simply replace what the FTC has lost. He urged his colleagues to support the passage of the Consumer Protection and Recovery Act to restore the FTC’s power under section 13 (b) to obtain fair monetary redress.
- Representative Jan Schakowsky said the Consumer Protection and Recovery Act is “urgent and necessary and it is an important step that Congress must take to protect consumers.” She further asserted that “[Congress] should not allow criminals to victimize American consumers with impunity. They have to pay (literally) what they owe. “
- Representative Gus Billrakis expressed concern about the FTC’s regulatory overshoot history under its use of § 13 (b). On April 20, 2021, he introduced a bill (“HR 2672”) to amend the law. If enacted, HR 2672 would require the FTC to submit a report to Congress on any enforcement action regarding fraud against the elderly.
The recorded live stream of the audience is available here. The statement of hearing prepared by Acting President Slaughter is available here.
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