FTC Review- Scam

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This ruling by the Supreme Court has cost consumers $1.5 billion, according to the Federal Trade Commission (FTC).   

After the AMG judgment, the FTC was unable to hold scammers accountable for the losses they had caused.   

Payday loan scammers were targeted by the Federal Trade Commission after the Supreme Court’s AMG decision.   

It was only in April 2021 that the Supreme Court ruled that the FTC could not seek monetary damages under FTC Act rule 13 because of the scammers’ efforts (b).  There is nothing the FTC can do to stop scammers in their tracks more effectively than monetary remedies. damage, civil fines, disgorgement, and restitution, among other things. 

13 (b) has been successfully used by the regulator against scammers for more than four decades. The FTC’s MLM cases we’re following have become substantially more convoluted as of this writing.   

They get away with millions of dollars in consumer funding even if they lose FTC cases.    With Commissioner Kelly Slaughter and Chair Lina Khan at the helm, the FTC issued a statement on May 31st addressing the present post-AMG situation.   

With this decision, the Commission has lost its most effective tool for pursuing monetary damages from companies that violate the FTC Act.   

For example, the FTC has been able to offer billions of dollars in relief—$11.2 billion from 2016 to 2022—on matters such as telemarketing fraud, anticompetitive pharmaceutical practices, data security and privacy, and fraud targeting senior citizens. It has been a year since the Supreme Court ruled that the FTC lacks the authority to collect monetary remedies under Section 13(b) for harmed consumers. FTC prevailed, but was unable to penalize the defendants adequately:   

Consumers lost “at least $137 million” as a result of a fraudulent investment scheme.   

As a result of losing case 13 (b), the FTC had to negotiate a settlement, which limited their recovery to $2.4 million.   

A “over $1.5 billion” scam was perpetrated by a loan firm. The FTC was obliged to seek a settlement after losing 13 (b), securing only $18 million for consumer relief.   

The remaining funds belong to the lending institution.   

Consumers were duped out of $493 million by a pharmaceutical corporation through artificially high drug costs.   

The Federal Trade Commission (FTC) filed a lawsuit against the corporation. The AMG judgment was upheld by the court, and the firm was able to keep its roughly $500 million in illicit profits, while consumers received nothing.   

It just keeps going and going.   

AMG has already cost customers more than $1.5 billion in relief that the agency could have secured under Section 13 (b), and the losses are escalating by the day.   

FTC v. Redwood Scientific Technologies is a case in the MLM sector.   

The FTC’s case against Redwood Scientific and its owner, Jason Cardiff, was a complete failure. 13 (b) meant I didn’t have to pay any damages or restitution, so I didn’t have to pay anything.   

Cardiff’s boasting about not having to pay back anything in our comments backs up the FTC’s claim that AMG has “emboldened” scammers.   

Despite the fact that he lost, Cardiff considers the case a victory because he was not required to pay any damages or reparations.   

FTC v. Neora and FTC v. Success by Health are two other MLM instances that were decimated by AMG. Both of these cases are still in the midst of their respective investigations.   

A big MLM-related fraud lawsuit was not brought by the FTC until last month. Additional infractions are included in FTC v. Financial Education Services, including 13 (b). 

As a result, we can’t be certain that the FTC will award any compensation, even if this is the first significant FTC action filed since AMG (nearly $500 million in alleged fraud).  When discussing the changes the FTC has had to make in filing lawsuits against scammers, Commissioner Slaughter states, “Staff throughout the FTC have done an excellent job of pivoting in terms of tools and techniques to soften the effects on consumers.”

As a result of these remarkable efforts, the best we can hope for is that justice will be weakened or delayed. Using our other instruments, the extent of relief is often much more limited.   

Section 19 of the FTC Act is one of the agency’s alternative strategies. Section 19 has the drawback of extending the statute of limitations for bringing a lawsuit past the time it takes to investigate and file a complaint from a consumer.   

Those consumers who are the first to be affected by an illegal practice—often by their complaints initiating an investigation—are cut off from redress as a result of this restriction, which can be extremely punitive.   

That’s ludicrous in a consumer protection sense.   

Sending corporations penalty warnings and drafting new regulations are long-term enforcement techniques that require time. Compared to our prior federal court system, which had an eight-year statute of limitations, it can add years to the time it takes to return wrongfully obtained funds to clients’ bank accounts. It is also important to note that the FTC does not have any other options for monetary remedy or the disgorgement of ill-gotten gains for competition breaches.   

The Federal Trade Commission (FTC) has placed its trust in Congress to act in the wake of test cases like FTC v. Financial Education Services, at least for the MLM business.   

For more than four decades, Section 13 (b) has been well-established black-letter legislation that allows the Commission to collect equitable monetary remedies when firms or people break the law enforced by the Commission (b). The House of Representatives passed a bill this summer that would accomplish exactly that. We urge the Senate to quickly take up and adopt this legislation.   

The Consumer Protection Remedies Act of 2022 was introduced by Senator Cantwell on May 4th. The measure was referred to the Commerce, Science, and Transportation Committee.   

On the 11th of May, the Committee “directed [the bill] to be reported favorably with an amendment.”    When it comes to bill legislation in the United States, I’m not an expert. However, as you can see from the bill’s webpage on Congress’s website, it is still in its infancy.   

Restoring FTC remedies via 13 new provisions in the Consumer Protection Remedies Act of 2022 is a goal of the legislation, if it becomes law (b).   

Unless that happens, I guess we can say goodbye to US regulation of MLM fraud. Fortunately, this does not apply to SEC and CFTC prosecutions involving securities fraud, which are unaffected. Pyramid fraud, on the other hand, may be in jeopardy.

This ruling by the Supreme Court has cost consumers $1.5 billion, according to the Federal Trade Commission (FTC).    After the AMG judgment, the FTC was unable to hold scammers accountable for the losses they had caused.    Payday loan scammers were targeted by the Federal Trade Commission after the Supreme Court’s AMG decision.   …

This ruling by the Supreme Court has cost consumers $1.5 billion, according to the Federal Trade Commission (FTC).    After the AMG judgment, the FTC was unable to hold scammers accountable for the losses they had caused.    Payday loan scammers were targeted by the Federal Trade Commission after the Supreme Court’s AMG decision.   …

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