Alexandra Megaris

Subscribe to Alexandra Megaris's Posts

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.

Contact:Read more about Alexandra Megaris

The Seventh Circuit has once again weighed in on the scope of the Federal Trade Commission’s (FTC’s) remedial authority. The case, FTC v. Credit Bureau Center, LLC, has had, in the words of the court, “a long and winding journey through the federal courts, including a trip to the Supreme Court and back.” Last week’s decision focused on monetary relief under Section 19 of the FTC Act—specifically, on how to calculate redress under Section 19 and whether monetary relief imposed under Section 19 can be deposited into the U.S. Treasury as disgorgement.

The lower court entered a judgment of $5,260,671.36, which equaled Credit Bureau Center’s total revenues minus refunds already paid and chargebacks. On appeal, Credit Bureau Center argued that a monetary award under Section 19 must be limited to net profits that can be traced to the underlying fraud (as opposed to net revenues). Credit Bureau Center relied on Liu v. SEC, 140 S. Ct. 1936 (2020), in which the Supreme Court found that a disgorgement award could not exceed a firm’s net profits from wrongdoing. The Seventh Circuit rejected this because Section 19—unlike the statute at issue in Liu—explicitly permits the refund of money to make consumers whole, and, therefore, relief under Section 19 is not limited to the traditional scope of remedies available in equity. Continue Reading Another Day, Another Decision Interpreting Section 19 of the FTC Act

Marketers and lead generators have new guidance in the form of enforcement orders on what the Federal Trade Commission (FTC) appears to consider required practice when obtaining consumer consent prior to the sale, transfer, or disclosure of consumer information that will be used in marketing.

The upshot is that the FTC provided several affirmative requirements…

Thirteen months after proposing sweeping changes to its Endorsements and Testimonial Guides (Guides), the Federal Trade Commission (FTC) has finalized its revised guidelines and released an updated set of FAQs to help guide the industry with respect to the proper use of customer reviews, influencer marketing, and traditional endorsements and testimonials. 

The new Guides are over 80 pages. We will dive into specific sections in greater depth in the coming weeks, but here are some highlights:Continue Reading FTC Finalizes Updated Endorsement and Testimonial Guides

Starting June 27, operators of online marketplaces will need to comply with a new federal statute, the Integrity, Notification, and Fairness in Online Market Retail Marketplaces for Consumers Act or INFORM Act.

The purpose of the law, which passed in December as part of the appropriations bill, is to help combat e-commerce fraud and the sale of counterfeit goods online. Although the law directly applies to the operators of these marketplaces, individuals and companies that sell their products on the marketplaces will be impacted.

The INFORM Act requires online marketplaces to undertake specific due diligence of “high-volume third-party” sellers. The statute defines high-volume third-party sellers as sellers that, in any continuous 12-month period during the previous 24 months, (1) have entered into 200 or more discrete sales or of new or unused consumer products and (2) have an aggregate total of $5,000 or more in gross revenues on the marketplace. The law does not apply to used goods or to services sold via online marketplaces.Continue Reading New Law Regulating Online Marketplaces Will Impact Sellers, Too

As the dust settles from the Supreme Court’s decision in AMG Capital Management, LLC v. FTC, 141 S. Ct. 1341 (2021), which gutted the Federal Trade Commission’s authority to obtain equitable monetary relief in court, the contours of the FTC’s remedial authority continue to be shaped by the lower courts.

Most recently, the Eleventh Circuit weighed in on whether Section 19 of the FTC Act authorizes the FTC to obtain an asset freeze and impose a receiver. Prior to AMG, the FTC routinely obtained such preliminary relief against companies and individuals the FTC believed were engaging, or about to engage, in unfair deceptive business practices. In doing so, the FTC would rely on its authority under Section 13(b) of the FTC Act. However, after AMG, the FTC can only use Section 13(b) to obtain forward-looking injunctive relief.Continue Reading Eleventh Circuit Says FTC Can Seek Asset Freezes and Receivership Under Section 19

FTC investigations require companies to act quickly. Failure to do so can have draconian consequences. Read more for recent case examples.
Continue Reading Spoliation and Failure to Disclose: What Gets Swept Under the Rug in FTC Investigations Lands in a Dangerous Pit

Last week, the Federal Trade Commission and state attorneys general in Arizona, California, Georgia, Illinois, Massachusetts, New York, and Texas settled with advertising giants Google and iHeartMedia for deceptive advertising and endorsements under Section 5 of the FTC Act.

The FTC and states allege that Google paid iHeartMedia to record and broadcast ads featuring “radio personalities” endorsing Google’s phone, the Pixel 4. In the ads, the radio personalities lavished praised on the Pixel 4, using first-person language to describe the Pixel 4’s functionalities and calling it their favorite phone.

The ads aired over 11,200 times between October and December 2019. The problem? The Pixel 4 had not been released for sale, and Google was unable to provide the phones to the radio personalities before the ads aired. In essence, the radio personalities were extolling the Pixel 4 without ever having used one.Continue Reading FTC Sues Advertising Behemoths Google and iHeartMedia for Deceptive Endorsements by Radio Personalities

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