As we previewed last week here, the FTC released an Advanced Notice of Proposed Rulemaking (ANPR) on earnings claims as it embarked on a mission to adopt a rule that would give the FTC, in its own words, “an important new tool to return money to consumers injured by deceptive income claims, and to
Kick-Off Time for FTC Rulemaking on Earnings Claims
Last Thursday (February 10), the FTC announced that it “will vote” at its February 17 open meeting to issue an Advance Notice of Proposed Rulemaking (ANPR) on “deceptive earnings claims for business ventures, gig or other work opportunities, or educational, coaching or training offerings.” Here’s our take on what we can glean from this announcement
Senate Spars with FTC BCP Director Sam Levine over FTC Enforcement, Surprisingly from Both Sides
Yesterday, the Senate Commerce Committee’s Subcommittee on Consumer Protection, Product Safety and Data Security held its second hearing in less than a year on COVID-19 fraud, price gouging, and related enforcement efforts. Groundhog Day Eve was a fitting date for the hearing, as the Federal Trade Commission – this time through Bureau of Consumer Protection
FTC Settles with Company Over Failure to Post Negative Reviews
Companies often ask us whether they can highlight positive reviews without mentioning negative ones. The good news is that there are ways to do that, but when the conversation veers from highlighting positive reviews to suppressing negative ones, things get trickier. This afternoon, the FTC announced its first case involving a company’s failure to post
Next Up – Earnings Claims: Notice of Penalty Offenses Sent to 1,100 Direct Selling Companies and Others in the Gig Economy
In its third recent Penalty Offense Authority notice, the FTC today notified more than 1,100 companies offering “money-making opportunities” that it intends to pursue civil penalties of up to $43,792 per violation for misrepresentations related to potential earnings and related characteristics about the opportunity. Recipients of the notice include virtually every major direct selling company and others in the gig economy such as Amazon, DoorDash, Lyft, and Uber.
That makes more than 1,800 companies that have been put on notice of penalty offenses in the past month. It also crosses another alleged deceptive practice off the list laid out in the October 2020 paper authored by current Bureau Director Sam Levine and former FTC Commissioner Rohit Chopra, entitled The Case for Resurrecting the FTC Act’s Penalty Offense Authority. Next up? Well, if the Chopra/Levine paper points the way (and it appears to), we should expect future notices that focus on allegedly unfair and deceptive data harvesting and targeted marketing.
In addition to the eight categories of misrepresentations in today’s notice ranging from the amount of earnings possible to the amount of training provided, the sample cover letter published online also includes a section on endorsements and testimonials. This means that each company receiving today’s notice also will receive the notice published last week on endorsements and testimonials, which over 700 companies also received (with some minimal overlap in that list).
Continue Reading Next Up – Earnings Claims: Notice of Penalty Offenses Sent to 1,100 Direct Selling Companies and Others in the Gig Economy
FTC Threatens 70 Colleges with Civil Penalties in Attempt to Resurrect Penalty Offense Authority
Making good on promises to creatively explore all of its options for enforcement, the FTC yesterday notified 70 for-profit higher educational institutions that it intends to use its long dormant Penalty Offense Authority to obtain civil penalties when institutions make misrepresentations about their programs and job and earnings prospects. The move closely follows recommendations proposed
Chopra Confirmed as Next CFPB Director; Departure Leaves FTC Evenly Divided
The Senate yesterday confirmed current FTC Commissioner Rohit Chopra as the new Director of the Consumer Financial Protection Bureau (CFPB). The 50-48 vote to confirm was along party lines and followed Vice President Harris’s breaking of a 50-50 tie to invoke cloture and end debate on Chopra’s nomination.
With Chopra’s departure from the FTC
Privacy Expert Alvaro Bedoya Nominated to FTC
The future composition of the FTC became a bit clearer on Monday, as the White House announced that President Biden will nominate privacy expert and scholar Alvaro Bedoya as FTC commissioner. If confirmed, Bedoya would take the seat currently held by Commissioner Rohit Chopra, whose nomination as CFPB Director remains pending, and serve in a
TINA.org Lobbies FTC to Use Penalty Offense Authority against Direct Sellers
TINA.org continues to aggressively beat the enforcement drum. Today, its leaders sent a letter to Acting Director of the Bureau of Consumer Protection Samuel Levine encouraging the FTC “to implement a penalty offense program targeting the direct selling industry and its market-wide practice of utilizing deceptive earnings representations and false health claims.”
As we discussed
FTC Continues Push for Civil Penalties with Important Implications for Financial Institutions and MLMs
The FTC yesterday took two actions that on their face seemed part of the regular course, but that could signal notable changes for financial institutions and multi-level marketing companies. First, the FTC filed an amended complaint against RCG Advances, a merchant cash advance provider, alleging that the company violated the Gramm-Leach-Bliley Act and seeking civil