Bill Seeks to Restore FTC’s Efforts to Provide Monetary Relief

The bill was introduced after the U.S. Supreme Court issued a ruling that the FTC Act does not authorize the FTC to seek, or a court to award, equitable monetary relief to consumers.

4/28/2021 2:00 PM

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Bill Seeks to Restore FTC’s Efforts to Provide Monetary Relief

Members of Congress and the Federal Trade Commission introduced legislation challenging a unanimous ruling from the U.S. Supreme Court concerning the FTC’s ability to seek financial restitution under the FTC Act.

On April 22, the Supreme Court reversed and remanded the 9th Circuit’s opinion in AMG Capital Management LLC v. FTC, finding the FTC Act does not permit courts to award equitable monetary relief such as restitution or disgorgement, ACA International previously reported for members.

As a result, the FTC will have to go through the administrative process in order to request monetary restitution and disgorgement, which is subject to additional limitations that would not be present under Section 13(b) of the FTC Act.

Following the court’s decision, U.S. Rep. Tony Cárdenas, D-Calif., introduced the Consumer Protection and Recovery Act (H.R. 2668) to amend Section 13(b) of the FTC Act “to explicitly reaffirm the FTC’s longstanding authority to obtain injunctive and equitable relief, including monetary redress for consumers in court for all violations of the laws it enforces,” according to a news release.

The House Energy and Commerce Subcommittee on Consumer Protection and Commerce, where Cárdenas serves as vice chair, held a hearing on the bill and the Supreme Court’s decision April 27.

“These recent decisions have significantly limited the commission’s primary and most effective tool for providing refunds to harmed consumers, and, 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 testimony during the hearing.

She stated the FTC has used its authority under Section 13(b) of the FTC Act to secure relief for consumers in incidents of telemarketing fraud, data security and privacy and deceptive business practices, among others.

The bill from Cárdenas is partisan and cosponsored by all Democrat members on the Subcommittee on Consumer Protection and Commerce as well as House Energy and Commerce Chair Frank Pallone, D-N.J.

“There are no adequate substitutes in the current law that can simply replace what the FTC has lost,” Pallone said in a news release. “The remaining authority of the FTC is too weak and, where available, will take too long for meaningful relief for our constituents. Vice Chair Cárdenas’ bill restores the minimum authorities necessary for an effective enforcement regime. That is what the Consumer Protection and Recovery Act does, and I hope my colleagues on both sides of the aisle will work with us to pass this bill quickly. Putting consumers first is something we should all be able to agree on.

According to The Hill, Republicans on the House subcommittee pushed back on Cárdenas’ bill and called for a more bipartisan approach.

“If we are to find a balanced solution to addressing FTC authorities, we must work in good faith and in a bipartisan manner to do so,” Rep. Gus Bilirakis, R-Fla., said in the article, noting that no Republican commissioners from the FTC testified during the hearing. He is ranking member of the subcommittee that met April 27.

“Republicans all agree seeking financial restitution for victims is essential, but there is a history of regulatory overreach we must consider and how that impacts all business sectors as we rebound from the COVID-19 pandemic," Bilrakis said, according to The Hill.

Subcommittee Chairwoman Jan Schakowsky, D-Ill., a cosponsor of Cárdenas’ bill, said legislation from Republican members will be considered, but Tuesday’s hearing was an urgent response to the Supreme Court’s decision.

U.S. Sen. Maria Cantwell, D-Wash., issued a statement that the Senate is also working on legislation to protect the FTC’s authority to seek monetary relief under the FTC Act.

ACA members can read more about the decision in AMG Capital Management LLC v. FTC here.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Bill Seeks to Restore FTC’s Efforts to Provide Monetary Relief

Members of Congress and the Federal Trade Commission introduced legislation challenging a unanimous ruling from the U.S. Supreme Court concerning the FTC’s ability to seek financial restitution under the FTC Act.

On April 22, the Supreme Court reversed and remanded the 9th Circuit’s opinion in AMG Capital Management LLC v. FTC, finding the FTC Act does not permit courts to award equitable monetary relief such as restitution or disgorgement, ACA International previously reported for members.

As a result, the FTC will have to go through the administrative process in order to request monetary restitution and disgorgement, which is subject to additional limitations that would not be present under Section 13(b) of the FTC Act.

Following the court’s decision, U.S. Rep. Tony Cárdenas, D-Calif., introduced the Consumer Protection and Recovery Act (H.R. 2668) to amend Section 13(b) of the FTC Act “to explicitly reaffirm the FTC’s longstanding authority to obtain injunctive and equitable relief, including monetary redress for consumers in court for all violations of the laws it enforces,” according to a news release.

The House Energy and Commerce Subcommittee on Consumer Protection and Commerce, where Cárdenas serves as vice chair, held a hearing on the bill and the Supreme Court’s decision April 27.

“These recent decisions have significantly limited the commission’s primary and most effective tool for providing refunds to harmed consumers, and, 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 testimony during the hearing.

She stated the FTC has used its authority under Section 13(b) of the FTC Act to secure relief for consumers in incidents of telemarketing fraud, data security and privacy and deceptive business practices, among others.

The bill from Cárdenas is partisan and cosponsored by all Democrat members on the Subcommittee on Consumer Protection and Commerce as well as House Energy and Commerce Chair Frank Pallone, D-N.J.

“There are no adequate substitutes in the current law that can simply replace what the FTC has lost,” Pallone said in a news release. “The remaining authority of the FTC is too weak and, where available, will take too long for meaningful relief for our constituents. Vice Chair Cárdenas’ bill restores the minimum authorities necessary for an effective enforcement regime. That is what the Consumer Protection and Recovery Act does, and I hope my colleagues on both sides of the aisle will work with us to pass this bill quickly. Putting consumers first is something we should all be able to agree on.

According to The Hill, Republicans on the House subcommittee pushed back on Cárdenas’ bill and called for a more bipartisan approach.

“If we are to find a balanced solution to addressing FTC authorities, we must work in good faith and in a bipartisan manner to do so,” Rep. Gus Bilirakis, R-Fla., said in the article, noting that no Republican commissioners from the FTC testified during the hearing. He is ranking member of the subcommittee that met April 27.

“Republicans all agree seeking financial restitution for victims is essential, but there is a history of regulatory overreach we must consider and how that impacts all business sectors as we rebound from the COVID-19 pandemic," Bilrakis said, according to The Hill.

Subcommittee Chairwoman Jan Schakowsky, D-Ill., a cosponsor of Cárdenas’ bill, said legislation from Republican members will be considered, but Tuesday’s hearing was an urgent response to the Supreme Court’s decision.

U.S. Sen. Maria Cantwell, D-Wash., issued a statement that the Senate is also working on legislation to protect the FTC’s authority to seek monetary relief under the FTC Act.

ACA members can read more about the decision in AMG Capital Management LLC v. FTC here.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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