Alex Megaris focuses on complex regulatory investigations and government enforcement matters involving state attorneys general, the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), state regulatory agencies, and the U.S. Congress. Alex also works closely with Venable's government affairs team in advocating for clients before these agencies. She has extensive experience with consumer protection laws, such as state unfair, deceptive and abusive practices (UDAAP) laws, the FTC Act, the Consumer Financial Protection Act, the FTC's Telemarketing Sales Rule, and product-specific regulations, including those regulating credit reporting, loan servicing, and debt collection.

At its most recent open meeting, the Federal Trade Commission voted unanimously to issue an Advance Notice of Proposed Rulemaking, seeking public comment on whether to modify or expand its Business Opportunity Rule.

The Business Opportunity Rule, first adopted in 2012, requires sellers of “business opportunities” to be able to substantiate any earnings claims they make, and to make certain enumerated disclosures pertaining to the potential transaction. These disclosures include:

  • The seller’s identifying information
  • Whether the seller is making earnings claims and, if so, substantiation for those claims
  • Whether the seller, affiliates of the seller, or its leaders have been involved in legal actions concerning misrepresentation, fraud, securities law violations, or unfair or deceptive practices in the previous 10 years
  • The terms of the seller’s cancellation or refund policy, if it has one
  • A list of people who have purchased the business opportunity in the previous three years


Continue Reading Proposed Rulemaking: FTC Dials in on Business Opportunities

Last week at its monthly open meeting, the Federal Trade Commission (FTC) unveiled two new rulemaking proceedings: the first deals with deceptive customer reviews and endorsements and the second with so-called junk fees

Both rulemakings are in their nascent stages. Last week’s actions—the issuance of two advance notices of proposed rulemaking (ANPRs)—simply request information from the public on the consumer harms caused by fake and paid reviews and junk fees. The road from ANPR to final trade rule is a long and winding one, particularly given the number of new rulemakings upon which this FTC has embarked, which Commissioner Christine Wilson has termed “Ruleapalooza.”

Continue Reading FTC Issues New Rulemaking Proceedings on Customer Reviews and “Junk Fees”

Customer reviews and ratings are powerful, low-cost marketing tools. Technology now allows marketers to harness this power on a scale that was unimaginable even five years ago. The ability to solicit, capture, and post reviews and ratings is virtually seamless. But it is just as easy to seek shortcuts or abuse the system. In response, the Federal Trade Commission (FTC) has devoted resources to addressing consumer review fraud, including through public education. Early in the year, it issued nonbinding guidance for both marketers and online review platforms, warning against potentially deceptive acts, such as faking, manipulating, or suppressing online reviews, as well as paying for higher rankings from purportedly “independent” consumer ranking websites. Online reviews should reflect customers’ honest opinions. So how does the FTC suggest you get there?

Continue Reading A Sign of the Times: Federal Trade Commission Releases Guidance on Consumer Reviews

The buzz around gig economy protections continued as the Federal Trade Commission took yet another action to safeguard gig workers. Last week, the FTC adopted a policy statement asserting its authority to address unfair and deceptive practices and anticompetitive conduct that harms workers in the gig economy.

The statement highlights data from several studies concerning the gig economy, including that it is expected to generate $455 billion in annual sales by 2023, and that 16% of Americans report earning income through an online gig platform. The statement also reports that, while gig work has already established itself in food delivery and transportation, it is now expanding into healthcare, retail, and other segments of the economy. The FTC noted that the decrease in demand for transportation during the COVID-19 pandemic illustrates “the precarious nature of gig work.”

The FTC statement focuses on three features of the gig economy “that implicate the Commission’s consumer protection and competition missions:”

Continue Reading New FTC Policy Statement: Agency Continues to Ramp Up Gig Worker Protections

The Federal Trade Commission’s recent action against Credit Karma serves as a reminder to advertisers that optimizing consumer conversion is not—and cannot be—the be-all and end-all. Regardless of what split or A/B testing results show, claims must be truthful, substantiated, and not misleading.

Per the FTC’s administrative complaint, Credit Karma advertised third-party credit offers to Credit Karma members as “pre-approved,” but, in fact, the creditors had not pre-approved the credit offers and consumers were required to apply and go through the creditors’ underwriting process. The FTC’s investigation showed that about one-third of those customers were denied the advertised credit.

Continue Reading FTC Action Against Credit Karma Underscores That Conversion Cannot Trump Compliance

At the height of the pandemic, the Federal Trade Commission took swift action to stamp out scammers and other actors looking to take advantage of—or simply make a buck off—the crisis. One of the early moves it made was to file separate lawsuits against a pair of companies that sold sanitizer, face masks, and other protective equipment gear (PPE), but failed to ship the products as promised.

As of this week, the FTC has won summary judgment in both cases, FTC v. QYK Brands LLC d/b/a Glowwy and FTC v. American Screening, LLC. The cases highlight the two following points.

Continue Reading When a Mail Order Rule Case Is Not Just About the Mail Order Rule

We recently discussed the various ways in which the Federal Trade Commission (FTC) is focusing on worker protections in the gig economy. Though we didn’t have a crystal ball to foresee it, the FTC announced that it is furthering those efforts through a new partnership with the National Labor Relations Board (NLRB). On July 19, 2022, FTC Chair Lina Khan and NLRB General Counsel Jennifer Abruzzo signed a Memorandum of Understanding (MOU) on behalf of their respective agencies to “promote interagency collaboration,” to enhance enforcement efforts, and to “better root out practices that harm workers.”

The NLRB is an independent federal agency that enforces federal labor regulations—namely, regulations prohibiting unfair labor practices—through investigations, administrative proceedings, and lawsuits. The NLRB also engages in rulemaking and conducts elections concerning the formation or decertification of unions. FTC Chair Khan stated that the agencies’ agreement will advance their “shared mission to ensure that unlawful business practices aren’t depriving workers of the pay, benefits, conditions, and dignity that they deserve.”

Continue Reading FTC Joins Forces with NLRB to Further Its Gig Economy and Worker Protection Agenda

Webinar | June 28, 2022 | 2:30 – 3:00 p.m. ET | REGISTER

Venable partners Len Gordon and Alexandra Megaris will present “What You Need to Know About FTC’s Proposed Changes to Its Endorsement Guides.” The Endorsement Guides, first issued in 1980 and last amended in 2009, reflect the Commission’s interpretation of how the FTC

Last week, the Federal Trade Commission filed a lawsuit in federal court in California against Gravity Defyer Medical Technology Corporation alleging the company made unsubstantiated claims that its footwear reduces knee, back, ankle, and foot pain and helps with conditions such as plantar fasciitis, arthritis, joint pain, and heel spurs.

But the FTC’s case is less about footwear than it is about the imaginative ways the agency continues to find ways to pursue monetary relief in the wake of AMG Capital Management LLC v. FTC. There are a few things here worth discussing.

First, the FTC is seeking civil penalties. How, you might ask? The complaint alleges that Gravity Defyer’s owner, Alexander Elnekaveh, violated a 2001 FTC consent order involving his former business, Gadget Universe, which sold an automotive aftermarket fuel-line magnet device. Under the order, Elnekaveh and Gadget Universe agreed to “not mispresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions, or interpretations of any test, study or research.”

Continue Reading Tied Up with the FTC: Agency Dusts Off 20-Year-Old Settlement to Pursue Civil Penalties