FTC & Identity Theft
The Federal Trade Commission or FTC deals with issues that touch the economic lives of most Americans. In fact, the agency has a long tradition of maintaining a competitive marketplace for both consumers and businesses. When the FTC was created in 1914, its purpose was to prevent unfair methods of competition in commerce as part of the battle to "bust the trusts". Over the years, Congress passed additional laws giving the agency greater authority to police anti-competitive practices.
In 1938, Congress passed the Wheeler-Lea Amendment, which included a broad prohibition against "unfair and deceptive acts or practices". Since then, the Commission also has been directed to administer a wide variety of other consumer protection laws, including the Telemarketing Sales Rule, the Pay-Per-Call Rule and the Equal Credit Opportunity Act.
Bureau of Consumer Protection
The Division of Advertising Practices
The Division of Consumer and Business Education
The Division of Enforcement
The Division of Financial Practices
The Division of Marketing Practices
The Division of Planning and Information
The Division of Privacy and Identity Protection
The International Division of Consumer Protection
Bureau of Competition
The Antitrust Laws
Research and Policy Studies
Bureau of Economics
Provides Economic Advice for Enforcement
Studies Effects of Legislative Options and Regulations
Analyzes Market Processes
How the FTC Brings An Action
Letters from consumers or businesses, pre-merger notification filings, Congressional inquiries or articles on consumer or economic subjects may trigger agency action. Generally, investigations are non-public to protect both the investigation and the companies involved.
If the Commmission believes that a person or company has violated the law or that a proposed merger may violate the law, the agency may attempt to obtain voluntary compliance by entering into a consent order with the company. A company that signs a consent order need not admit that it violated the law, but it must agree to stop the disputed practices outlined in an accompanying complaint or undertake certain obligations to resolve the anticompetitive aspects of its proposed merger.
If a consent agreement cannot be reached, the FTC may issue an administrative complaint or seek injunctive relief in the federal courts. The administrative complaints initiate a formal proceeding that is much like a federal court trial but before an administrative law judge: Evidence is submitted, testimony is heard, and witnesses are examined and cross-examined. If a law violation is found, a cease and desist order may be issued. Initial decisions by administrative law judges may be appealed to the full Commission.
Final decisions issued by the Commission may be appealed to the U.S. Court of Appeals and, ultimately, to the U.S. Supreme Court. If the Commission’s position is upheld, in certain circumstances, it may then seek consumer redress in court. If the company ever violates the order, the Commission also may seek civil penalties or an injunction.
In some circumstances, the Commmission can go directly to court to obtain an injunction, civil penalties or consumer redress. In the merger enforcement arena, it may seek a preliminary injunction to block a proposed merger pending a full examination of the proposed transaction in an administrative proceeding. The injunction preserves the market’s competitive status quo. The FTC seeks federal court injunctions in consumer protection matters typically in cases of ongoing consumer fraud. By going directly to court, the Commission can stop the fraud before too many consumers are injured.
The Commission also can issue Trade Regulation Rules. If the Commission staff finds evidence of unfair or deceptive practices in an entire industry, it can recommend that the Commission begin a rulemaking proceeding. Throughout the rulemaking proceeding, the public has opportunities to attend hearings and file written comments. The Commission considers these comments along with the entire rulemaking record – the hearing testimony, the staff reports, and the Presiding Officer’s report – before making a final decision on the proposed rule. An FTC rule may be challenged in any of the U.S. Courts of Appeal. When issued, these rules have the force of law.
Visit FTC's new website which provides resources for dealing with scams and identity theft.