FTC Testifies before Congress on its Work to Curb COVID-19 Scams and Warn Consumers about Pandemic-related Frauds, Cons, and Swindles

In testimony today before the Senate Commerce Committee’s Subcommittee on Consumer Protection, Product Safety, and Data Security, the Federal Trade Commission provided an update on its work to protect consumers from scams and frauds related to the COVID-19 pandemic. The testimony noted that since the crisis began, the agency has filed more than a dozen law enforcement actions, directed the removal of deceptive claims made by more than 350 companies, and issued more than 100 alerts to educate consumers and businesses about recognizing and avoiding these schemes.

Testifying on behalf of the Commission, Acting Director of the Bureau of Consumer Protection Daniel Kaufman said that the FTC filed its first action under the newly enacted COVID-19 Consumer Protection Act, seeking monetary penalties against a company that deceptively marketed vitamin D and zinc products as scientifically proven to treat or prevent COVID-19. He also noted that the FTC recently released a report describing the major challenges consumers face from the pandemic, emphasizing the agency’s commitment to protecting consumers from COVID-19 related scams.

The testimony detailed several ways the Commission is working to protect consumers from pandemic-related harms, including bringing law enforcement actions against companies engaged in COVID-19 related fraud, consumer education and outreach, and data collection and evaluation.

According to the testimony, the Commission has acted quickly to identify and stop schemes that have proliferated during the pandemic in response to the demand for scarce goods, to peddle potential treatments and cures, and to exploit consumers’ and businesses’ financial hardship during the crisis.

 The FTC filed its first court action just one month after the March 2020 declaration of a national emergency, and since then law enforcement actions by the Commission have focused on scams pitching unproven treatments or supposed cures for COVID-19, companies that have broken their promises to quickly ship much-needed goods, including personal protective equipment, and imposters falsely claiming to be affiliated with government relief programs. The testimony states that the FTC also has issued more than 350 warning letters to companies and individuals, some jointly with the U.S. Food and Drug Administration, challenging their deceptive COVID-19 claims. The Commission monitored the responses to these letters closely, and in the vast majority of cases, the companies removed the problematic claims quickly. The testimony noted that the Commission is determined to pursue swift enforcement action against those who do not comply.

The FTC also has taken enforcement actions that protect consumers’ privacy and data from digital harms exacerbated by the pandemic and partnered with the Consumer Financial Protection Bureau to ensure that renters are not subjected to unlawful practices in light of the eviction crisis caused by COVID-19.

Next, the testimony described the Commission’s work in the areas of consumer outreach and education, which includes consumer and business alerts on COVID-19 related topics, a multimedia campaign, substantive business guidance, and outreach coordinated with its law enforcement partners.

Finally, the testimony described the FTC’s work to collect data, including fraud-related complaints, from consumers and incorporate this information into online public dashboards showing aggregate complaint data, with subsets broken down by age, type of fraud, and geographic location. Between January 2020 and early April 2021, the FTC has received more than 436,000 reports from consumers, reflecting $399 million lost to COVID-19 related fraud.

While much has been accomplished, the testimony concludes, combatting scams related to the pandemic “will remain a top priority for the Commission, and we will use every tool we have to stop this predatory behavior, including seeking civil penalties under the newly enacted COVID-19 Consumer Protection Act, where appropriate.”

The Commission vote to approve the testimony before the Senate Committee on Commerce, Science, and Transportation was 4-0.