Category Archives: FTC

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No Restitution for the Weary: Seventh Circuit Limits FTC’s Ability to Seek Restitution

The Seventh Circuit issued a decision this week that guts a key part of the FTC’s enforcement arsenal – the ability to obtain equitable monetary relief from defendants when the FTC challenges conduct in federal court under Section 13(b) of the FTC Act. We’ve written previously—here, here, here, and here—regarding the limits courts have placed … Continue Reading

FTC Gathers Video Game Industry to Talk Loot Boxes

On August 7, 2019, the Federal Trade Commission (FTC) held a workshop examining consumer protection issues related to “loot boxes” in video games in Washington, DC. Loot boxes are digital containers of virtual goods that a user can purchase in-game using real-world currency or earn based on meeting certain in-game milestones. A user does not … Continue Reading

Exactly How Long is the Long Arm of the Law? The FTC Seeks to Extend its Reach to Offshore Payment Processors

We frequently hear about the “long arm of the law,” but, in the case of the Federal Trade Commission, just how far does that arm actually reach? The FTC recently filed an amended complaint in the U.S. District Court for the Central District of California adding SIA Transact Pro, a Latvian payment processor, and its … Continue Reading

Oh Won’t You Stay: The Exception to the Governmental Unit Exception to the Bankruptcy Code’s Automatic Stay

Clients sometimes ask whether filing bankruptcy can protect them from Federal Trade Commission scrutiny. The saga of Joseph Rensin and his company BlueHippo provides an opportunity to review the limited protection bankruptcy provides from the FTC. For more on the underlying case see our prior blog posts here and here. Rensin, the owner of BlueHippo, … Continue Reading

FTC Reminds Crowdfunders: Deliver on Your Promises or Refund

Crowdfunding plays an important role in democratizing access to capital for small entrepreneurs, but as we’ve written before, entrepreneurs of every ilk need to remember that their representations to consumers need to be truthful, accurate and not misleading. Last month, the FTC filed a complaint against Douglas Monahan and his company iBackPack of Texas, LLC, … Continue Reading

FTC Warns Ukraine Company: You Can’t Let Kids Use Your Dating Apps

With more and more children becoming technologically savvy, parents are having to rely more heavily on laws such as the Children’s Online Privacy Protection Act (“COPPA”) to shield their children’s information. The FTC recently issued a warning letter to a Ukraine-based company, Wildec LLC (“Wildec”), for allowing children under the age of thirteen to access … Continue Reading

Online Lender Settles with FTC on UDAP, TSR, and EFTA Claims

The Federal Trade Commission’s settlement with an online consumer lending platform, Avant LLC, highlights the importance of legal and regulatory compliance in the fintech space, including—perhaps most importantly—what happens after a loan is made. According to the Commission’s complaint, Avant offered personal consumer loans through its website. The complaint notes that although the loans were … Continue Reading

Updates in FTC and California’s Continuing Enforcement of Continuity Programs

Thought that the FTC and California planned to cool off on enforcing trial and subscription programs? Think again. The FTC and California continue to bring these actions with alarming regularity. For those of you who haven’t been tracking these issues, last year California’s Automatic Renewal Law was amended to tighten the restrictions on continuity programs. … Continue Reading

Wait – So There Is No “Viagra for the Brain?” FTC Yet Again Bars Dietary Supplement Sellers from Making Unsupported Cognitive Claims

Consumers over 50 are on an endless quest for things that make us feel, look, or perform like younger versions of ourselves. Marketers aware of how aging demographics are tuned into this quest. The FTC has been especially vigilant in policing claims that dietary supplements, especially in the cognitive and memory space, can turn back … Continue Reading

FTC’s Snack Service Settlement Reminds DTC Companies Not to Incentivize Reviews

Positive online reviews have become essential for any business marketing goods or services over the internet, especially for trendy services like food delivery and custom health product sales. But the FTC’s newly-announced settlement with startup healthy snack service UrthBox reminds marketers that online praise must be freely given, not bought—even if the compensation offered isn’t … Continue Reading

Fraudsters and Facilitators, Privacy and Penalties, Shire and Selection: The FTC’s Plans for Consumer Protection

Winding down the 67th Antitrust Law Spring Meeting last week, Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection (the “Bureau”), provided an overview of the FTC’s consumer protection priorities. Director Smith reiterated that Chairman Simons’ focus on law enforcement applies across the Bureau’s five major areas: marketing, finance, advertising, privacy, and enforcement. … Continue Reading

FTC Hints It’s Feeling the Buzz

Last September, the National Advertising Division (NAD) published a decision assessing whether the editorial content surrounding an affiliate link constituted “national advertising” requiring substantiation. At issue were two statements in a BuzzFeed “shopping guide,” in which the author tested and recommended various skincare products. The NAD reviewed BuzzFeed’s internal procedures with respect to the editorial … Continue Reading

Definitely not “Winning”: Scammers Pay Millions to FTC and Missouri Attorney General for Running Deceptive Prize Scheme

In February 2018, the FTC teamed up with the Missouri Attorney General’s office in filing a complaint against a prize promotions company and others that allegedly operated a large-scale deceptive prize scam targeting the elderly. A little more than a year later, the FTC and the Missouri AG’s office announced that they reached a settlement … Continue Reading

Best to Leave Cherry Picking to Cherry Farms: Regulators Revive Lawsuit Challenging Data Used to Support Memory Improvement Claims

Three things to remember when making claims: always ensure that you have the appropriate substantiation—I forget the other two. Last week, the Second Circuit issued an order vacating the Southern District of New York’s dismissal of an FTC complaint alleging that Quincy Bioscience falsely advertised a memory supplement, known as Prevagen. A little background: Quincy … Continue Reading

FTC Sets Its Sights on Fake Customer Reviews

Since updating its Endorsement Guides in 2015 to keep pace with the meteoric rise of social media and influencers in marketing, the FTC has placed a significant emphasis on the need to disclose material connections between advertisers and endorsers. Through its Guides, informal business guidance, blog posts, warning letters, and multiple enforcement actions, the FTC … Continue Reading

Stop the Presses: Third Circuit Limits FTC’s Access to Federal Court for Past Conduct

The Federal Trade Commission suffered a significant blow yesterday. In a decision that many saw coming—bloggers here included—the Third Circuit curtailed authority the FTC has been using for decades to confront allegedly unlawful past conduct. The decision has a direct impact on the ability of the FTC to obtain injunctions against defendants for alleged past … Continue Reading

FTC Opts Out of Canning the CAN-SPAM Rule

In June 2017, the FTC initiated a regulatory rule review of the Controlling the Assault of Non-Solicited Pornography and Marketing Rule (“CAN-SPAM Rule” or “Rule”), seeking information about the Rule’s costs and benefits as well as its economic and regulatory impact. The FTC received 92 responses to its request for public comment. Last week, the … Continue Reading

FTC and FDA Issue Warning Letters to Supplements Companies

Earlier this week, the FTC and the FDA announced a joint effort to combat unsubstantiated health claims in the supplement space. In three warning letters—to Gold Crown Natural Products, TEK Naturals, and Pure Nootropics, LLC (collectively, the “Companies”)—the agencies explain that certain efficacy claims may lack competent and reliable scientific evidence for support. Specifically, the … Continue Reading

Think Asterisks Don’t Matter?*

Every brand that has designed a product label has felt the call of the asterisk. Visual real estate on packaging and in advertisements is limited, and marketing departments often groan at the piles of clumsy language that legal departments insist make it onto the page. But the elegant solution—dropping an asterisk and including the disclaimers, … Continue Reading
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