FTC Testifies Before Congress on Its Work to Protect Consumers from COVID-19 Scams and Threats to Its Ability to Return Money to Victims of Illegal Conduct

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On April 20, members of the Federal Trade Commission (FTC) testified before the Senate Commerce Committee to update lawmakers of their efforts to curtail scams and other fraudulent consumer abuses related to the novel coronavirus (COVID-19). In addition to highlighting the abuses consumers have faced during COVID-19, the FTC reiterated its call for Congress to pass legislation reaffirming that the agency has authority to prohibit unlawful conduct and seek monetary relief for consumers who have lost money from illegal conduct. The FTC has historically relied on Section 13(b) of the Federal Trade Commission Act to prohibit illegal conduct and secure monetary relief for consumers, but the Supreme Court ruled two days after this testimony that the agency does not have authority under the Federal Trade Commission Act – Section 13(b) to seek, nor a court to award, equitable monetary relief, such as restitution or disgorgement.

Further, the testimony discussed efforts by the FTC to educate businesses and consumers on misinformation and COVID-19-related scams. “The testimony noted that the FTC has brought law enforcement actions against those who have allegedly broken promises to quickly ship personal protective equipment and cleaning products, tricked consumers into paying for sanitizing products that were never delivered, falsely claimed that their products could treat and/or prevent COVID-19, and made deceptive claims regarding stimulus benefits.” Moreover, the FTC has issued warning letters to sellers or marketers of products that allege to treat or prevent COVID-19. During testimony, the FTC affirmed its commitment to ensure renters are not subjected to unlawful practices, including, but not limited to, unlawful screening practices of potential landlords.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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