Thursday, December 16, 2021
Bureau of Consumer Protection: Deceptive and Misleading Conduct
- The FTC announced rulemaking geared towards combatting government and business impersonation fraud. During the COVID-19 pandemic, there has been a significant uptick in scammers utilizing various forms of communication to impersonate government agencies or businesses in order to steal money or a consumer’s identity. In order to combat these deceptive schemes, the FTC launched an Advance Notice of Proposed Rulemaking (ANPR) seeking comment from the public. The ANPR notes that the Commission’s authority to seek consumer redress or civil penalties in these cases is currently very limited. The provisions related to impersonation under the Telemarketing Sales Rule and Mortgage Assistance Relief Services Rule cover only specific sectors or methods of scams. Chair Lina M. Khan issued a statement and Commissioner Christine S. Wilson released her remarks in support of the ANPR. Chair Khan highlighted the Supreme Court decision in AMG Capital Management, LLC v. FTC stating that it significantly curbed the FTC’s ability to recover money for the victims of these schemes. This is the first rulemaking initiated under the Commission’s streamlined rulemaking procedures.
Bureau of Consumer Protection: Deceptive and Misleading Conduct
- The FTC announced that MyLife.com, Inc., an online platform providing background report services, and its CEO, have been banned from engaging in deceptive negative option marketing and are required to pay $21 million following allegations that they tricked consumers with “teaser background reports” to lure them into difficult-to-cancel subscription programs. The Department of Justice, on behalf of the Federal Trade Commission, claimed that the company’s teaser reports often falsely insinuated that individual reports contained arrest, criminal, and sexual offender records such that consumers would want to learn more by signing up for the company’s automatic renewal program.