FTC Testifies on Post-Katrina Help for Consumers

The Federal Trade Commission today told the U. S. House of Representatives Committee on Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection that it is working to protect consumers and competitive markets in the wake of Hurricane Katrina. John Seesel, the FTC’s Associate General Counsel for Energy, told the Subcommittee the Commission has instituted numerous initiatives to protect consumers in the aftermath of the hurricane.

The testimony notes that the FTC is participating in the Hurricane Katrina Fraud Task Force with the Department of Justice, the FBI, the U. S. Postal Inspection Service and the Executive Office for United States Attorneys, among others, to identify Katrina fraud cases and ensure timely and effective prosecution. A critical element of the Task Force’s work is the consumer complaint data in the FTC’s Consumer Sentinel database. Consumers can file complaints by phone, by mail or on the FTC Web site at www.ftc.gov. More than 1,400 law enforcement agencies have access to the database. “The FTC staff has developed a code for Katrina-related complaints in Consumer Sentinel to make it easy for FTC staff, Task Force members, and other Sentinel users to identity these post-hurricane fraud data. The staff is creating weekly reports on post-hurricane charity scams, identity theft, advance-fee credit scams, and other post-disaster frauds, and is posting them directly on Consumer Sentinel.”

On September 7, the FTC issued alerts to help address the financial challenges faced by those displaced by the storm and separated from their financial and other records to help them avoid identity theft, and to alert them to scams that might target them, the testimony says. The information is available in English and Spanish. The agency is reaching out to the U. S. Postal Service, the Federal Emergency Management Agency, and the Red Cross to distribute copies of the alerts in shelters and other locations where persons displaced by the storm will have access to them. The agency also has sent public service announcement scripts to radio stations nationwide urging consumers to be cautious when making donations to help the victims of the disaster, the testimony says. It also has sent scripts to radio stations in Louisiana, Mississippi, and Alabama, warning consumers about possible home-repair scams.

The testimony states that on September 7, the FTC unveiled a special Web site for consumers and businesses affected by Hurricane Katrina at www.ftc.gov/bcp/edu/microsites/recovery/hurricane/index.html. The site notes that, “. . . once the immediate hazards of a natural disaster are over, it’s inevitable that other problems surface. Among these are scams, frauds, and other consumer protection issues.” The site lists consumer education materials on topics related to other possible problems and frauds that victims may face, such as “Debris Removal Scams,” “Fake Disaster Officials,” “Home Ownership Issues,” “Job Scams,” “Rental Listing Scams,” and “Water Treatment or Purification Devices.”

“As part of its mission to protect competition and consumers in all markets, the Commission has mobilized significant resources to respond to issues raised by higher gasoline prices since Katrina,” the testimony states. The FTC, Seesel said, “is very conscious of the swift and severe price spikes that occurred immediately before and after Katrina made landfall. There have been numerous calls for investigations of ‘price gouging,’ particularly at the retail gasoline level . . . The Commission staff has already launched an investigation to scrutinize whether unlawful conduct affecting refinery capacity or other forms of illegal behavior have provided a foundation for price manipulation.” A determination that unlawful conduct has occurred “will result in aggressive law enforcement activity by the FTC,” he said.

The Commission vote to approve the testimony was 4-0.

Copies of the testimony are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.