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Acting FTC chair blasts Supreme Court decision: Justices 'ruled in favor of scam artists'

Acting FTC chair blasts Supreme Court decision: Justices 'ruled in favor of scam artists'
© Greg Nash

Acting Federal Trade Commission (FTC) Chairwoman Rebecca Kelly Slaughter criticized the Supreme Court’s unanimous decision Thursday to limit the agency’s ability to secure monetary relief for consumers from companies found to engage in deceptive practices. 

The court's opinion, delivered by Justice Stephen Beyer, said that the FTC’s authority under a provision known as Section 13(b) does not grant the agency the ability to obtain equitable monetary relief. 

Slaughter said the ruling took away the FTC’s “strongest tool” to help consumers and urged Congressional action. 

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“In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” Slaughter said in a statement on the case, AMG Capital Management v. FTC.

“With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole,” she added.

The case before the Supreme court involved the FTC’s complaint against AMG Capital and former race car driver and businessman Scott Tucker for alleged deceptive payday lending practices. 

The district court granted the FTC’s request for Tucker to pay $1.27 billion in restitution. The order was upheld on appeal, and AMG Capital requested the Supreme Court weigh in on the FTC’s authority. 

Breyer wrote that the court’s ruling does not prohibit the FTC from using other provisions of the law to seek restitution. 

“If the Commission believes that authority too cumbersome or otherwise inadequate, it is, of course, free to ask Congress to grant it further remedial authority,” he wrote

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Slaughter said the FTC relied on the provision to secure monetary relief for consumers in a range of cases, from telemarketing fraud and anti-competitive practices, to scams targeting vulnerable consumers such as senior citizens and veterans. 

Enforcement of Section 13(b) resulted in returning $11.2 billion to consumers during the past five years alone, according to the FTC. 

Slaughter and other commission members have pushed Congress to take action to ensure the FTC’s ability to protect consumers. 

The commissioners testified Tuesday before the Senate Commerce Committee regarding the need for 13(b) legislation. 

Slaughter will also appear before the House Commerce subcommittee on consumer protection next week to urge Congress to advance legislation that strengthens the FTC’s power. 

The push to strengthen the FTC’s power comes as antitrust scrutiny of top tech companies ramps up. 

The FTC, along with 46 states, Washington, D.C., and Guam, sued Facebook over allegations of an illegal monopoly. 

Facebook last month filed motions to dismiss the antitrust cases, in part due to claims that the FTC lacks the statutory authority to challenge past conduct.