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House votes to restore FTC’s authority to seek refunds and relief for fraud victims

Consumer Reports urges Senate to pass the Consumer Protection And Recovery Act 

WASHINGTON, D.C. – Consumer Reports praised the House of Representatives today for approving H.R. 2668, a bill that restores the Federal Trade Commission’s authority to prevent companies from profiting off of illegal actions and provide refunds for consumers who are victimized. The Consumer Protection and Recovery Act was introduced earlier this year in response to a recent U.S. Supreme Court decision that compromised the FTC’s ability to recover monetary relief for fraud victims.

“Consumers are being targeted by a whole host of pandemic-related fraudulent schemes at the same time that the FTC’s ability to protect them has been seriously hamstrung,” said Anna Laitin, director of financial fairness and legislative strategy for Consumer Reports. “This bill restores the FTC’s ability to go after unscrupulous companies, prevent them from profiting off of their actions, and recover timely refunds for consumers who are ripped off by fraud. We applaud the House for passing this legislation and urge the Senate to follow suit. We need to ensure the FTC has the tools it needs to vigorously enforce the law and provide victims of fraud the relief they deserve.”

Over the years, the FTC has recovered billions of dollars in relief for fraud victims using its authority under Section 13 (b) of the Federal Trade Commission Act. In AMG Capital Management, LLC, et al v. Federal Trade Commission, the Supreme Court ruled that the FTC does not have the authority to obtain “equitable remedies,” which include disgorgement of ill-gotten gains and monetary relief for victims under this section of the law. Instead, the Court held that the FTC must use another administrative procedure that can take longer and make it more difficult to obtain refunds for consumers.

In advance of the House vote, Consumer Reports joined with a group of consumer, labor, and privacy organizations in a letter to lawmakers urging them to pass H.R. 2668, which amends section 13(b) to clarify that the FTC has the authority to pursue restitution and money refunds for victims of fraud.