April 20, 2021

Cárdenas Introduces Consumer Protection and Recovery Act

WASHINGTON, DC – On Tuesday, Congressman Tony Cárdenas (D-CA-29), Vice Chair of the House Energy & Commerce Subcommittee on Consumer Protection and Commerce introduced the Consumer Protection and Recovery Act. This bill will cement the Federal Trade Commission’s ability to retrieve money for victims of fraud and scams.

The bill is cosponsored by every Democrat on the Energy & Commerce Subcommittee on Consumer Protection and Commerce: Full Committee Chairman  Pallone, Consumer Protection and Commerce Subcommittee Chair Schakowsky, and Reps. Rush, Castor, Trahan, McNerney, Clarke, Dingell, Kelly, Soto, Rice, Craig and Fletcher.

“The COVID-19 pandemic has given rise to an increase of scams and fraud that prey on consumers’ fears and financial insecurities,” said Congressman Tony Cárdenas (CA-29). “The FTC’s ability to return money taken from Americans through scams or fraud is under attack in the courts. Inaction is not an option and will only embolden these bad actors. That is why I am proud to introduce the Consumer Protection and Recovery Act along with my colleagues from the Consumer Protection and Commerce Subcommittee to restore and protect the FTC’s authority to put money back in the pockets of hard-working Americans.”

“The COVID-19 pandemic has unfortunately left many Americans more vulnerable to scams, but the FTC’s ability to return money to consumers who have been scammed is in jeopardy due to an uncertain impending Supreme Court decision,” Energy and Commerce Committee Chairman Pallone said. “Congressman Cárdenas’ legislation will ensure our nation’s premiere consumer protection agency maintains its ability to return money to victims of scams. I commend him for his leadership in protecting consumers and look forward to working together to advance this important legislation.”

Consumer Protection and Commerce Chair Schakowsky said, “This legislation is a necessary and urgent step to clarify the FTC’s authority under 13(b) of the FTC Act to provide redress to consumers who have been scammed. Unfortunately, this authority is under assault in the courts, and the FTC finds itself deprived of a critical tool. This legislation will ensure the FTC can protect American consumers and put money back in the pockets of consumers who have been the victims of fraud and other scams.  I applaud Vice Chair Cárdenas’s leadership on this issue, and I look forward to working with him and the entire Consumer Protection and Commerce Subcommittee to move this bill forward.”

The bill amends Section 13(b) of the FTC Act to explicitly reaffirm the FTC’s longstanding authority to obtain injunctive and equitable relief, including monetary redress for consumers in court for all violations of the laws it enforces. The bill also makes explicit that the FTC may pursue many kinds of equitable relief, including restitution for losses, contract reformation and recission, monetary refunds, and the refund of property, as well as forcing bad actors to return their ill-gotten gains.

“During these unprecedented times, it is imperative that Congress pass legislation that protects U.S. consumers and honest businesses from wrongdoers who steal money through fraud and deception. This bill, which TruthinAdvertising.org fully endorses, will ensure that scammers are not able to line their pockets with their ill-gotten gains and that victims of fraud are made whole,” said Bonnie Patten, executive director of Truthinadvertising.org.

“After recent years of litigious, whack-a-mole attacks on the FTC’s long-established authority to enforce laws and hold bad actors accountable in court, we are grateful that Congress is coming together to clarify the FTC’s statutory right to actively pursue monetary and equitable remedies on behalf of the public," said Christine Hines, Legislative Director at the National Association of Consumer Advocates.  

Justin Brookman, Director of Technology Policy for Consumer Reports and former FTC official, said, "Rep. Cárdenas' bill is important legislation that should be passed quickly into law. If the FTC can’t force wrongdoers to give up the profits from their illegal activities, the FTC is just a paper tiger. Scammers will have no reason to fear enforcement if the only consequence of getting caught is promising not to do it again. Congress needs to make rehabilitating the FTC a top priority, and this bill is a great start.  It's an important step to help ensure bad actors are held accountable, and consumers who are harmed get some relief."

“The Consumer Protection and Recovery Act will ensure that the courts have clear authority to stop unfair, deceptive or fraudulent practices in the marketplace and ensure that and actors are not allowed to keep ill-gotten gains. The Federal Trade Commission plays a key role in protecting consumers, and this clear authority will be one more powerful tool in the agency’s toolbox,” said Remington Gregg, Council for Civil Justice and Consumer Rights.