Success in getting refunds to people depends principally on whether the FTC has a reliable list of customers, including their contact information and the amount of money they spent. In most of our cases, the FTC has this information, and it mails checks out to a list of known customers. In other cases, there is no list of known customers or there is insufficient contact information, and the agency must use a claims process to identify people who are eligible for a refund. There are at least six steps involved in every refund program:
- Identify who is eligible for a refund.
- Determine how the money will be divided.
- Send refunds.
- Update contact information and resend payments, as needed.
- Consider whether an additional distribution is feasible.
- Send any remaining money to the U.S. Treasury.
Identifying who is eligible for a refund
FTC court orders typically require the company to provide a list of customers, their contact information, and how much each customer paid. If the agency obtains a reliable list of eligible recipients, then the agency mails checks or sends electronic payments directly to them. During calendar year 2024, the FTC used defendant data to send checks and electronic payments in 26 cases.
If the agency doesn’t have all the data it needs to send payments to eligible consumers, a claims process may be necessary. In such cases, the people affected must apply for a refund. The agency might conduct a media campaign and use paid advertisements to let people know that refund money is available and encourage them to visit our website to apply. A claims process typically increases the administrative costs of the refund program. Generally, the FTC receives claims from 5% to 50% of potential claimants. In 2024, the FTC completed a claims process and sent payments in 7 cases.
The agency’s Consumer Sentinel Network database may be used to find eligible recipients, either as a supplement to data from other sources, or occasionally, as the only source of data. Consumer Sentinel data contains millions of complaints from people who have contacted the FTC, the Better Business Bureau, or other federal, state, and local law enforcement offices. The FTC may search for complaints related to the defendants and use the contact information in those complaints to create a list of potential refund recipients. The FTC used Consumer Sentinel complaints as the primary source of data for one case in 2024.
Determining how the money will be divided
In cases where the court order does not specify the parameters of the refund program, FTC staff determines the eligibility criteria and the formula for calculating payments to eligible recipients. In cases where the settlement fund is not large enough to provide full refunds to every customer, the FTC analyzes the data to determine how best to distribute refunds. When making these decisions, FTC staff considers the administrative costs that must be paid for by the fund, the type of harm, the size of the refund to each recipient, how much variation there is between the lowest and highest loss amounts, and other details about the case. In most FTC cases, the money is distributed on a pro rata basis, meaning that each recipient receives an equal percentage of their total loss.
Sending refunds
The FTC has many mechanisms in place to verify the accuracy of our distributions and to confirm that only the approved recipients receive payment. First, unique identifiers are assigned to each potential claimant at the beginning of the case. FTC staff independently reviews each distribution, checks the proposed list of recipients against the master list, and investigates any discrepancies before approving a distribution. The agency also conducts payment audits to verify that only the rightful recipients received payments. In a claims process, we may ask for supporting documents or other information, and we apply analytical tools to identify and remove fraudulent or duplicate claims.
Once payments have been sent, the FTC carefully tracks which payments make it into the hands of affected consumers, and the agency uses that information for continuous improvement of our refund processes. In 2024, the FTC sent first round payments in 33 different cases, totaling nearly $315 million.
Updating names and addresses
Finding current contact information for eligible recipients is a challenge. Court cases sometimes take years to resolve, so the FTC uses several tools for updating addresses.
Before mailing checks, we check every distribution list against the National Change of Address system, which records change-of-address notices submitted to the U.S. Post Office. When a check is returned as undeliverable or remains uncashed after its void date, the agency conducts an address search to determine if there is a more recent address for the consumer, and then reissues a new check to the updated address.
The agency also uses different payment methods to reach additional consumers.
Considering whether an additional check mailing is feasible
After updating addresses and reissuing payments, as necessary, the FTC considers whether the remaining money can be used to send a second round of payments. For example, recipients might get 50% of their money back with the first payment and an additional 10% of their money back with the second payment. In very rare circumstances, such as when the agency recovers additional money from the defendants, we may send a third or fourth round of payments.
Usually, if there are sufficient funds to provide a meaningful refund amount to recipients and to pay for the related costs, the FTC sends a second round of payments. Generally, to be eligible for an additional payment, the consumer must have cashed their previous payment. In addition, the FTC sometimes imposes a minimum check amount that excludes some consumers who otherwise would have been eligible. In general, the FTC does not mail checks of less than $10.
In 2024, the FTC sent additional payments in 22 different FTC cases, totaling more than $10 million dollars.
Sending any remaining money to the U.S. Treasury
Whenever possible, the FTC uses the money it collects from defendants to provide refunds to injured consumers and pay the related administrative costs. When a refund program is not feasible or there is money left over after the refund program is complete, the FTC sends unused funds to the U.S. Treasury or to co-plaintiffs as required by the court and applicable law.
The agency generally closes a refund program and sends the remaining money to the U.S. Treasury when there is not enough money for another round of payments, or when affected consumers have received full refunds. On average, the money sent to the U.S. Treasury accounts for less than five percent of the total funds collected. In fact, over the last five years (2020-2024), the agency returned $2 billion to consumers, while sending less than $42 million to the U.S. Treasury.
In 2024, the FTC closed refund programs for 25 different cases that together resulted in more than
$148 million returned to consumers. In these cases, the FTC returned an average of $127.58 per person, and spent an average of $5.79 per person.
Refund Programs Administered by FTC Defendants and Other Federal Agencies
In rare circumstances, refunds resulting from FTC enforcement actions are provided by a third party administrator or by another federal agency. In many of these cases, to protect the interests of affected consumers, FTC staff provides consultation and support, including guidance about the proposed refund program and related communications to affected consumers. The FTC’s Enforcement Division engages in close oversight and monitoring of the program to ensure it complies with the order. For example, in 2024, an FTC settlement with BetterHelp resulted in more than $5 million returned to BetterHelp customers who had their personal health information used for advertising purposes.