The Federal Trade Commission testified at an oversight hearing before the Senate Committee on Commerce, Science, and Transportation about the agency’s work to protect consumers and promote competition, including its efforts to combat frauds designed to take advantage of consumers during the COVID-19 pandemic.
The agency testified to money returned to harmed consumers, but reiterated its request to Congress to gain authority to issue civil money penalties, as well as its support for federal privacy and data security legislation.
Over the past four fiscal years, the FTC has returned more than $975 million directly to consumers and won judgments under which consumers received nearly $10 billion more through defendant-administered redress programs. However, the FTC’s ability to keep getting such results for consumers has been threatened or curtailed by recent judicial decisions, the testimony stated.
“In short, our ability to get full redress for consumers is in peril. We request that Congress act now to preserve the FTC’s ability to restore to consumers money they lose to scammers and fraudsters,” the testimony stated.
FTC Chairman Joseph Simons testified at the hearing along with Commissioners Noah Joshua Phillips, Rohit Chopra, Rebecca Kelly Slaughter, and Christine Wilson. They discussed an overview of FTC resources and the steps the agency has taken to continue operating effectively during the pandemic.
The testimony also asked Congress to reauthorize the U.S. SAFEWEB Act, which allows the FTC to work with foreign authorities on cross-border law enforcement.
The testimony also described the FTC’s major accomplishments and challenges on the consumer protection front. The testimony outlined actions the FTC has taken to fight COVID-related fraud, in addition to the agency’s day-to-day work protecting consumers and promoting competition through law enforcement, policy and research, and consumer and business education.
Since the pandemic began in March, the FTC has issued joint warning letters with the Food and Drug Administration to more than 70 marketers regarding claims that their products will treat, cure, or prevent COVID-19, and there are additional warning letters in the pipeline, the testimony stated. The FTC also has issued its own warning letters to more than 200 additional marketers of COVID-19 products.
In addition, the FTC has taken action to address unscrupulous businesses posing as the Small Business Administration (SBA). In conjunction with the SBA, the FTC issued eight warning letters to such companies and also took action to stop a company the FTC charged with deceptively claiming to be an approved lender for the federal coronavirus relief lending program for small businesses.
Overwhelmingly, companies that received FTC warning letters have taken quick steps to correct their problematic claims, the testimony noted. However, when a company fails to take action in response to a warning letter, or a warning letter is not appropriate given the conduct at issue, the FTC has pursued legal action.