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Which court removed from the FTC, Congress can give back



(Reuters) – The US Supreme Court, by a 9-0 vote, on Thursday ruled the Federal Trade Commission's ability to compel fraudsters and companies that acted fraudulently to return ill-gotten gains and convicted in favor of a criminally convicted payer who challenged the agency.

The Court essentially overturned a practice that the FTC has been using since the 1980s.

The Big Number

The FTC, which enforces antitrust laws and investigates deceptive practices, returned $ 11.2 billion to consumers over the past five years.

Among companies that paid refunds is the Volkswagen Group of America, which in 2017 agreed to pay $ 5 billion for cheating on diesel emission tests, to Yellowstone Capital, which agreed this month to pay more than $ 9.8 million to resolve allegations that it continued to withdraw money from companies' bank accounts after they had been repaid.

The penalties introduced in the past will continue, but the agency's ability to take similar action in the future is now severely limited.

Long, resource-intensive road

With this decision, the FTC can still go after such companies but the process is elaborate and resource. -intensive, said former FTC chairman William Kovacic. "There is another way but it's just not really good. As a result, it (the decision) is a terrible blow to the anti-fraud program.

For many other cases, the FTC was able to combine 5 (b) and 1

9 (a) (2) in the FTC Act to gain monetary relief. To do this, the agency must first win in an administrative process and then go for monetary relief in a district court. One such case, in which Figgie International sold heat detectors that they said were more efficient than smoke detectors, took 12 years to resolve during this lengthy process.

The bar for the government to win is higher than 19 (a) (2)), and it has a three-year deadline. Standard 13 (b), which the Supreme Court ruled on Thursday, has no restrictions.

Congress Can Fix

Last fall, FTC commissioners – then three Republicans and two Democrats – called on Congress to pass a law specifically to give it the power to demand reimbursement. Acting President Rebecca Slaughter reiterated that ground on Thursday.

Representative Tony Cardenas, a Democrat, introduced legislation this week to allow the FTC to seek "fair exemption" for violations of laws it enforces.

Senator Maria Cantwell, chair of the Senate Commerce Committee, also expressed interest in passing a bill allowing the FTC to seek redress. Catalog

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