FTC’s 13(b) authority had returned $11B to consumers ripped off by scams between 2017-2021 

Cantwell bill would restore critical authority to protect consumers

As Americans reported losing nearly $9 billion to fraud in 2022 alone, U.S. Senator Maria Cantwell (D-Wash.), Chair of the Senate Committee on Commerce, Science and Transportation, secured bipartisan agreement today from all three nominees to be Commissioners on the Federal Trade Commission (FTC) that Congress must restore the FTC’s authority to return money to consumers victimized by illegal scams, fraud or unfair business practices.

In April 2021, the Supreme Court slashed the FTC’s ‘Section 13(b)’ authority, which the Commission utilized to return $11.2 billion dollars to consumers in the five years prior to the decision. Since then, fraud against consumers has only risen.

“The FTC’s role has never mattered more,” Sen. Cantwell said during today’s nomination hearing for Rebecca Slaughter, Andrew Ferguson and Melissa Holyoak to serve on the Commission. “In 2022, American consumers reported losing over $8.8 billion to fraud, a 30% increase over 2021 – a number likely to increase as bad actors exploit the ability to try to turbocharge fraud.”

During her questions, Sen. Cantwell called the FTC’s 13(b) authority an important federal tool to get money back to frauded consumers and asked: “Do you each of you … support reestablishing 13(b) and without limitations? Or if you believe in limitations, explain what limitations that you think we need?” 

“Yeah, that 13(b) authority is critical for our ability to help injured consumers be whole, so I strongly support restoring it,” responded current FTC Commissioner Rebecca Slaughter, who was renominated by President Biden.

“I agree with Commissioner Slaughter. This is critical. That what they thought was the 13(b) authority was a critical component of the FTC’s enforcement toolkit, and I support restoring something that looks very much like it,” Andrew Ferguson, republican FTC Commissioner nominee, followed.

“And I agree. Before the AMG case … the FTC recovered [over] $10 billion dollars for consumers. It's a very important tool for enforcers,” Melissa Holyoak, republican FTC Commissioner nominee, replied.

“I would just say that you are likely, if you're successful in your nominations, I guarantee you we will be back to this very specific question,” Sen. Cantwell said. “And so we're trying to get an intent here. And I think I have it. Consumers deserve to get these refunds without great hampering, and I think that's really important.”

Last Congress, Sen. Cantwell introduced legislation to restore the authority and released a Senate Commerce Committee report outlining the implications of the Supreme Court’s April 2021 decision in AMG Capital Management LLC v. FTC that gutted the Commission’s enforcement authority under Section 13(b) of the FTC Act.  For more than 40 years, the FTC relied on this enforcement power to refund money illegally taken from consumers and small business owners through unlawful and unfair business practices, including telemarketing fraud, pyramid schemes, and data security and privacy scams. It had been especially critical in cases involving technology and pharmaceutical companies, including Amazon, Uber, AT&T, Teva and Tracfone, which returned millions of dollars to victims of illegal conduct.

View Senator Cantwell’s transcript and video here.