Order compliance: A behind-the-scenes look

If the Commission is to attain the objectives Congress envisioned, it cannot be required to confine its road block to the narrow lane the transgressor has traveled; it must be allowed effectively to close all roads to the prohibited goal, so that its order may not be bypassed with impunity.

That’s from the Supreme Court’s 1952 decision in FTC v. Ruberoid, but it also outlines part of the job description of the Bureau of Consumer Protection’s Enforcement Division. 

In recent decades, the FTC has solidified its role as a law enforcement agency, bringing hundreds of fraud cases and establishing favorable law in courts across the country. But the sharp increase in litigation posed a challenge: ensuring compliance with hundreds of new orders. In 2005, BCP asked its Enforcement Division to shoulder that responsibility.

How did the Division go about managing that massive task? Step #1: It developed a state-of-the-art database that tracks the status of orders and sends reminders of important dates – for example, when compliance reports are due. Step #2: The Division created new processes to use the database to monitor compliance. Since July 2010, BCP has put those tools to work to complete compliance reviews for close to 400 defendants.

But it’s not just about data. The Enforcement Division assigns experienced compliance attorneys to each completed case. They are responsible for ensuring that defendants file timely compliance reports. With that information in hand, they evaluate the reports and conduct a stem-to-stern compliance review to make sure the order is having its intended effect. If the report leaves them with questions, they follow up with the defendants for more information. Sometimes the result is a full investigation of possible order violations.

Orders entered in BCP cases cover a broad range of subjects and the Enforcement Division has experience with them all. Take data security or privacy as an example. Many orders in those cases require an initial third-party assessment of the company’s practices. Among other things, the Enforcement Division compliance attorney carefully reviews that third-party assessment. The attorney often consults experts in the field and may contact both the defendant and the person who conducted the assessment for clarification and additional information. If the assessment is still lacking, the attorney asks for more data or even a new assessment. This process continues until we’re satisfied the defendant is in full compliance. If that resolution can’t be reached, the Enforcement Division may open a contempt investigation.

The process, however, doesn’t have to be adversarial. In our experience, most defendants willingly provide the additional information we need to verify compliance or take the steps necessary to bring their practices into line with what the order requires. The process often has the side benefit of helping defendants understand their obligations. This give-and-take can reduce the risk of inadvertent order violations.