Markets Wired

In testimony before Congress today, the Federal Trade Commission described its efforts to fight fraud, noting that during the past year the agency has obtained judgments totaling more than $11.9 billion to consumers harmed by deceptive and unfair business practices.

Testifying before the Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Data Security, FTC Acting Chairman Maureen K. Ohlhausen and Commissioner Terrell McSweeny described law enforcement work to stop pernicious frauds that often harm those who can least afford to lose money.

The testimony stated that the FTC’s wide-ranging targets include imposter scams, where fraudsters call people and pretend to be government agents, well-known businesses, family members, or others, tricking consumers into sending money. The testimony described how the agency works with other federal and state law enforcement agencies as well as international partners to fight these frauds, including efforts against a massive fraud ring in India that took hundreds of millions of dollars from U.S. consumers.

The Commission continues to target telemarketing scams that harm consumers, such as technical support scams that falsely claim consumers’ computers are in need of repair, and robocall schemes that blast millions of prerecorded messages pitching fraudulent goods or services. The testimony noted that last year the Commission led a multinational crackdown with nearly 40 cases against operations responsible for billions of illegal robocalls.

The FTC also combats scams that harm small business owners and entrepreneurs. The testimony discussed two recent actions against companies charged with deceiving small businesses into paying for services that were not as represented. It described a recent case involving a deceptive patent promotion scheme, and the FTC’s case against Herbalife in which the FTC alleged that the multi-level marketer deceptively stated that people who joined its ranks would earn substantial income. The FTC obtained a settlement order requiring Herbalife to fully restructure its U.S. business operations and pay $200 million for consumer redress.

The testimony also described the agency’s efforts against a range of other frauds, including: 1) fake prize promotions, 2) “free” trial offers with recurring fees for products or services consumers never ordered, 3) scams aimed at people struggling to pay their mortgages and other debts, and 4) abusive debt collectors. It also mentioned the FTC’s work to stop deceptive and fraudulent schemes involving car purchases and refinancing, and noted the $10 billion settlement against Volkswagen Group of America, Inc. for deceiving consumers, and its historic $586 settlement with Western Union for its involvement in money transfer scams. The testimony noted the creation of an Office of Technology Research and Investigation to help the agency keep abreast of technology changes affecting consumers, and its consumer and business outreach and education programs that reach tens of millions of people and businesses each year.

In addition, the testimony stated that, as the agency has long called for, repealing the FTC Act’s common carrier exception, which puts common carriers subject to the Communications Act beyond the FTC’s enforcement authority, would improve the Commission’s ability to protect consumers from unfair or deceptive acts or practices.

The Commission vote approving the testimony and its inclusion in the formal record was 2-0.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.