FTC Testifies Before Congress on its Work to Protect Consumers from COVID-19 Scams, and Threats to its Ability to Return Money to Victims of Illegal Conduct

In testimony before the Senate Commerce Committee, the Federal Trade Commission updated lawmakers on its efforts to combat scams and address other consumer issues related to the COVID-19 pandemic, while urging lawmakers to ensure the agency has the authority it needs to prohibit illegal conduct and return money to consumers who have been victims of illegal conduct.

Testifying on behalf of the Commission, Acting FTC Chairwoman Rebecca Kelly Slaughter along with Commissioners Noah Joshua Phillips, Rohit Chopra, and Christine S. Wilson detailed the FTC’s work to protect consumers through law enforcement actions and consumer and business education aimed at dispelling misinformation and warning about the latest COVID-19-related scams. The testimony noted that the FTC has brought law enforcement actions against those who have allegedly broken promises to quickly ship personal protective equipment and cleaning products, tricked consumers into paying for sanitizing products that were never delivered, falsely claimed that their products could treat and/or prevent COVID-19, and made deceptive claims regarding stimulus benefits. Most recently, the FTC deployed its new authority under the COVID-19 Consumer Protection Act to charge that a chiropractor and his company deceptively marketed products containing vitamin D and zinc as scientifically proven to treat or prevent COVID-19.

The testimony also noted that the FTC has issued hundreds of warning letters, many with other federal agencies, to sellers or marketers of products that claim to treat or prevent COVID-19; to those making misleading claims about pandemic relief loans; and to Voice over Internet Protocol service providers and others related to illegal telemarketing calls. The overwhelming majority of those who have received warning letters removed problematic claims, but the FTC reiterated its promise to take swift enforcement action against those recipients who fail to comply, according to the testimony.

In response to the eviction crisis, the testimony also detailed the FTC’s work with the Consumer Financial Protection Bureau to ensure renters are not subjected to unlawful practices. In addition, the FTC will continue its work to ensure that background screening companies comply with the Fair Credit Reporting Act and do not engage in actions that could unfairly deny housing to potential renters.

Many of the FTC’s efforts to help consumers during the pandemic are detailed in a new report released Monday describing the major challenges consumers face and the Commission’s efforts to help. These efforts include using reports from consumers to identify and respond to emerging unlawful practices in real time; filing more than a dozen law enforcement cases and directing the removal of deceptive claims related to COVID-19 made by more than 350 companies; and educating consumers and businesses through a multi-media campaign, including more than 100 alerts on COVID-related topics.

In its testimony, the Commission also reiterated its call for Congress to pass legislation reaffirming that the agency has authority to prohibit unlawful conduct and seek monetary relief for consumers who have lost money from illegal conduct. The FTC’s 13(b) authority to secure relief for consumers, including those harmed by scammers seeking to exploit the pandemic, has been put at risk by recent federal court rulings. While the issue is currently pending before the U.S. Supreme Court, the testimony noted that the uncertainty created by the recent court rulings has affected some pending enforcement cases. The FTC has used its authority under Section 13(b) of the FTC Act to return billions of dollars to consumers targeted by a wide variety of scams and anticompetitive practices.

The Commission vote to approve the testimony before the Senate Commerce Committee was 4-0.