Case Threatens FTC Power to Return Billions to Consumers
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That’s how much the Federal Trade Commission says it’s refunded to consumers harmed by fraud, scams, and other violations over the last five years, relying on a legal power it’s at risk of losing at the hands of the Supreme Court.
Since 2019, the government agency tasked with protecting consumers from fraud and unfair business practices has faced a legal challenge to one of the most potent weapons in its arsenal: it’s authority to seek monetary redress and relief from companies it accuses of wrongdoing. FTC commissioners expect the Supreme Court to rule soon in the case, where plaintiff AMG Capital Management, a payday loan company, argues the FTC has misinterpreted the FTC Act to unduly expand its powers.
On Tuesday, a U.S. Senate committee held a hearing about what action lawmakers could take if the FTC’s authority is struck down. The Supreme Court has arguably tilted in a more pro-business direction since Amy Coney Barrett replaced the late Ruth Bader Ginsburg in 2020.
“Returning money to consumers who have been harmed is among the most important things we do, but the courts are dramatically curtailing our ability to deliver that relief,” FTC Acting Chairwoman Rebecca Kelly Slaughter told senators, according to prepared remarks released online. She called on Congress to act quickly to affirm the FTC’s authority.
The power in question is authorized by Section 13(b) of the FTC Act, which the FTC uses in court to seek monetary redress as part of its consumer protection role. For example, the FTC used that section when it sued the credit bureau Equifax for a 2017 data breach that had exposed the personal information of 147 million people, winning at least a $575 million settlement to, in part, compensate consumers.