July 2022

Federal Trade Commission, National Labor Relations Board Forge New Partnership to Protect Workers from Anticompetitive, Unfair, and Deceptive Practices


The Federal Trade Commission is joining with the National Labor Relations Board (NLRB) in a new agreement that will bolster the FTC’s efforts to protect workers by promoting competitive U.S. labor markets and putting an end to unfair practices that harm workers. The new memorandum of understanding between the two agencies outlines ways in which the Commission and the Board will work together moving forward on key issues such as labor market concentration, one-sided contract terms, and labor developments in the “gig economy.”

“I’m committed to using all the tools at our disposal to ensure that workers are protected from unfair methods of competition and unfair or deceptive practices,” said FTC Chair Lina M. Khan. “This agreement will help deepen our partnership with NLRB and advance our shared mission to ensure that unlawful business practices aren’t depriving workers of the pay, benefits, conditions, and dignity that they deserve.”

 “Workers in this country have the right under federal law to act collectively to improve their working conditions. When businesses interfere with those rights, either through unfair labor practices, or anti-competitive conduct, it hurts our entire nation,” said NLRB General Counsel Jennifer A. Abruzzo. “This MOU is critical to advancing a whole of government approach to combating unlawful conduct that harms workers.”  

The new agreement enables the FTC and the NLRB to closely collaborate by sharing information, conducting cross-training for staff at each agency, and partnering on investigative efforts within each agency’s authority. The FTC is responsible for combatting unfair and deceptive acts and practices and unfair methods of competition in the marketplace. The NLRB is responsible for protecting employees from unfair labor practices which interfere with the rights of employees to join together to improve their wages and working conditions, to organize a union and bargain collectively, and to engage in other protected concerted activity.

The MOU identifies areas of mutual interest for the two agencies, including the extent and impact of labor market concentration; the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; labor market developments relating to the “gig economy” and other alternative work arrangements; claims and disclosures about earnings and costs associated with gig and other work; the impact of algorithmic decision-making on workers; the ability of workers to act collectively; and the classification and treatment of workers. 

The agreement is part of a broader FTC initiative to use the agency’s full authority, including enforcement actions and Commission rulemaking, to protect workers. The FTC has made it a priority to scrutinize mergers that may harm competition in U.S. labor markets. Research shows that these markets are already highly concentrated, and less competitive labor markets can enable firms to harm workers by lowering wages, reducing benefits, and perpetuating precarious or exploitative working conditions. The FTC is working with the Department of Justice to update the agencies’ merger guidelines, looking to provide guidance on how to analyze a merger’s impact on labor markets.

The FTC has also prioritized cracking down on anticompetitive contract terms that put workers at a disadvantage by leaving them unable to negotiate freely over the terms and conditions of their employment. The agency is scrutinizing whether some of these contract terms, particularly in take-it-or-leave-it contexts, may violate the law. At recent open Commission meetings the agency has heard concerns about noncompete clauses that have been imposed on some workers, and as a result it has opened a docket to solicit public comment on the prevalence and effects of contracts that may harm fair competition. It already has taken action to protect workers in several Commission orders, including:

In addition, the agency will continue to take action to stop deceptive and unfair acts and practices aimed at workers; particularly those in the “gig economy” who often don’t enjoy the full protections of traditional employment relationships. The FTC’s actions in this area include:

  • Suing Amazon in 2021 for illegally withholding more than $61 million in tips from drivers for its Amazon Flex program. In that case, the FTC alleged that Amazon had made numerous promises to its drivers that they would receive 100 percent of their tips, but actually withheld tip money from its drivers for years. Amazon agreed to an FTC order requiring them to surrender the full amount owed, which the FTC paid to affected drivers;
  • Suing Uber in 2017 for making deceptive earnings claims to potential drivers as well as deceiving them about the terms of a vehicle leasing program. The FTC alleged that the company touted median income levels in various cities that were greatly exaggerated and advertised lease and purchases prices lower than the prices actually available. Uber agreed to a federal court order requiring them to surrender $20 million that the FTC used to compensate drivers;
  • Suing online lead seller HomeAdvisor, Inc., alleging it used deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesspeople operating in the “gig” economy; and
  • Suing fast-food chain Burgerim, accusing the chain and its owner of enticing more than 1,500 consumers to purchase franchises using false promises while withholding information required by the Franchise Rule.

Workers who believe that their labor rights have been violated can call 1-844-762-6572 for assistance filing an unfair labor practice charge. Or they can contact their closest NLRB Field Office or submit a charge on the NLRB’s website.

The memorandum of understanding was signed by FTC Chair Lina M. Khan and NLRB General Counsel Jennifer A. Abruzzo.



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FTC and 18 States Sue to Stop Harris Jewelry from Cheating Military Families with Illegal Financing and Sales Tactics


The Federal Trade Commission and a group of 18 states sued national jewelry retailer Harris Jewelry to stop the company from cheating military families with illegal financing and sales practices. According to the complaint, the jewelry company deceptively claimed that financing jewelry purchases through Harris would raise servicemembers’ credit scores, misrepresented that its protection plans were not optional or were required, and added the plans to purchases without consumers’ consent. The complaint also includes a charge that the jewelry company violated the Military Lending Act, the FTC’s first action under this Act.

Under a proposed order with the FTC and multistate group, the company must stop collection of millions of dollars in debt, provide approximately $10.9 million in refunds for purchased protection plans, provide refunds for overpayments, and assist with the deletion of any negative credit entries pertaining to debt in consumers’ credit reporting file. The company also is required to complete its shutdown of operations and to dissolve pursuant to applicable state laws, once it meets the obligations of the order.

“Today’s action against Harris Jewelry shows that companies that target our country’s servicemembers with false promises and deceptive sales practices will face serious consequences,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to working with state enforcers to halt unfair and deceptive business practices across the marketplace. We are grateful for their partnership in this case, which allowed us to deliver strong relief for servicemembers.”

“It’s abhorrent that Harris Jewelry built their business by taking advantage of young servicemembers risking their lives to protect our country,” said New York Attorney General Letitia James. “Harris Jewelry claimed to serve and support our troops, but its business practices were entirely self-serving. For years, Harris Jewelry misled military members and saddled them with thousands of dollars of debt. My office joined forces with the FTC and 17 other states to protect servicemembers from Harris Jewelry and combat their predatory practices. Today’s action will help thousands of servicemembers get back on their feet after falling victim to Harris Jewelry’s schemes. Our troops bravely put our protection above their own and deserve to be treated with integrity and respect. Predatory lenders and businesses harming servicemembers should be warned that their actions will not be tolerated.”

“The Department of Defense appreciates the work of the FTC and other partners in protecting servicemembers and their families from such harmful practices and in securing appropriate remedies,” said Gilbert R. Cisneros, DoD Under Secretary of Defense for Personnel and Readiness. “We believe these efforts contribute to servicemembers’ overall financial well-being and readiness.” 

According to the complaint, Harris Jewelry violated the FTC Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Military Lending Act, the Holder Rule; and state law in connection with jewelry sales and financing to members of the military. Specifically, the FTC alleges that Harris Jewelry:

  • Made false or unsubstantiated claims that financing jewelry purchases through the company would result in higher credit scores: The company told servicemembers that they would achieve a significant improvement in their credit score by entering into a retail installment contract with Harris Jewelry and making all payments on time when, in fact, that was not true in many instances.
  • Misrepresented that the protection plan was required to finance purchases: In connection with the sale of jewelry and military-themed gifts, Harris Jewelry offered a protection plan that covered ring and watch sizing, battery replacements, and repairs. In several instances, the company offered items for sale and gave the false impression that the protection plan was not optional or was required to finance the purchase, when it was in fact optional. 
  • Failed to provide written disclosures and meet authorization requirements for contracts as required by law: Harris Jewelry failed to include written disclosures in its retail installment contracts as required by the Truth in Lending Act and Military Lending Act, and meet authorization requirements as required by the Electronic Fund Transfer Act. Its internet and print ads also failed to include the required Truth in Lending disclosure. The company also failed to provide written notice as required by the FTC’s Holder Rule in its contracts, and failed to make oral disclosures at the time of sale as required by the Military Lending Act.

Enforcement Action

In addition to requiring the company to come into compliance with the Military Lending Act, Truth in Lending Act, Electronic Fund Transfer Act, and Holder Rule, the proposed order requires Harris Jewelry to:

  • Stop collection of millions in debt;
  • Refund approximately $10.9 million for purchased protection plans;
  • Provide refunds for overpayments;
  • Contact consumer reporting agencies and request deletion of negative credit entries and counterorder outstanding judgments against consumers;
  • Stop misrepresentations and baseless claims;
  • Stop marketing, offering for sale or financing, and selling or financing ancillary products;
  • Stop selling, assigning, or transferring retail installment contracts or other consumer debt to other persons; and
  • Complete its shutdown of operations, and dissolve following state law, once the order requirements are met.

Under the order, Harris Jewelry will contact consumers entitled to refunds for the protection plans, and must also post a notice on its website about the availability of refunds. Consumers who have specific questions about obtaining redress may contact the New York State Attorney General’s Office at (315) 523-6080.  

The FTC and states are grateful for the Department of Defense’s coordination and support on this matter.  

The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the Eastern District of New York.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.



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FTC and 18 States Sue to Stop Harris Jewelry from Cheating Military Families with Illegal Financing and Sales Tactics


The Federal Trade Commission and a group of 18 states sued national jewelry retailer Harris Jewelry to stop the company from cheating military families with illegal financing and sales practices. According to the complaint, the jewelry company deceptively claimed that financing jewelry purchases through Harris would raise servicemembers’ credit scores, misrepresented that its protection plans were not optional or were required, and added the plans to purchases without consumers’ consent. The complaint also includes a charge that the jewelry company violated the Military Lending Act, the FTC’s first action under this Act.

Under a proposed order with the FTC and multistate group, the company must stop collection of millions of dollars in debt, provide approximately $10.9 million in refunds for purchased protection plans, provide refunds for overpayments, and assist with the deletion of any negative credit entries pertaining to debt in consumers’ credit reporting file. The company also is required to complete its shutdown of operations and to dissolve pursuant to applicable state laws, once it meets the obligations of the order.

“Today’s action against Harris Jewelry shows that companies that target our country’s servicemembers with false promises and deceptive sales practices will face serious consequences,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to working with state enforcers to halt unfair and deceptive business practices across the marketplace. We are grateful for their partnership in this case, which allowed us to deliver strong relief for servicemembers.”

“It’s abhorrent that Harris Jewelry built their business by taking advantage of young servicemembers risking their lives to protect our country,” said New York Attorney General Letitia James. “Harris Jewelry claimed to serve and support our troops, but its business practices were entirely self-serving. For years, Harris Jewelry misled military members and saddled them with thousands of dollars of debt. My office joined forces with the FTC and 17 other states to protect servicemembers from Harris Jewelry and combat their predatory practices. Today’s action will help thousands of servicemembers get back on their feet after falling victim to Harris Jewelry’s schemes. Our troops bravely put our protection above their own and deserve to be treated with integrity and respect. Predatory lenders and businesses harming servicemembers should be warned that their actions will not be tolerated.”

“The Department of Defense appreciates the work of the FTC and other partners in protecting servicemembers and their families from such harmful practices and in securing appropriate remedies,” said Gilbert R. Cisneros, DoD Under Secretary of Defense for Personnel and Readiness. “We believe these efforts contribute to servicemembers’ overall financial well-being and readiness.” 

According to the complaint, Harris Jewelry violated the FTC Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Military Lending Act, the Holder Rule; and state law in connection with jewelry sales and financing to members of the military. Specifically, the FTC alleges that Harris Jewelry:

  • Made false or unsubstantiated claims that financing jewelry purchases through the company would result in higher credit scores: The company told servicemembers that they would achieve a significant improvement in their credit score by entering into a retail installment contract with Harris Jewelry and making all payments on time when, in fact, that was not true in many instances.
  • Misrepresented that the protection plan was required to finance purchases: In connection with the sale of jewelry and military-themed gifts, Harris Jewelry offered a protection plan that covered ring and watch sizing, battery replacements, and repairs. In several instances, the company offered items for sale and gave the false impression that the protection plan was not optional or was required to finance the purchase, when it was in fact optional. 
  • Failed to provide written disclosures and meet authorization requirements for contracts as required by law: Harris Jewelry failed to include written disclosures in its retail installment contracts as required by the Truth in Lending Act and Military Lending Act, and meet authorization requirements as required by the Electronic Fund Transfer Act. Its internet and print ads also failed to include the required Truth in Lending disclosure. The company also failed to provide written notice as required by the FTC’s Holder Rule in its contracts, and failed to make oral disclosures at the time of sale as required by the Military Lending Act.

Enforcement Action

In addition to requiring the company to come into compliance with the Military Lending Act, Truth in Lending Act, Electronic Fund Transfer Act, and Holder Rule, the proposed order requires Harris Jewelry to:

  • Stop collection of millions in debt;
  • Refund approximately $10.9 million for purchased protection plans;
  • Provide refunds for overpayments;
  • Contact consumer reporting agencies and request deletion of negative credit entries and counterorder outstanding judgments against consumers;
  • Stop misrepresentations and baseless claims;
  • Stop marketing, offering for sale or financing, and selling or financing ancillary products;
  • Stop selling, assigning, or transferring retail installment contracts or other consumer debt to other persons; and
  • Complete its shutdown of operations, and dissolve following state law, once the order requirements are met.

Under the order, Harris Jewelry will contact consumers entitled to refunds for the protection plans, and must also post a notice on its website about the availability of refunds. Consumers who have specific questions about obtaining redress may contact the New York State Attorney General’s Office at (315) 523-6080.  

The FTC and states are grateful for the Department of Defense’s coordination and support on this matter.  

The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the Eastern District of New York.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.



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U.S. Federal Trade Commission Returning Almost $25 Million to Consumers Worldwide Who Were Defrauded by Next-Gen Sweepstakes Scheme


The U.S. Federal Trade Commission is sending payments to 244,745 consumers in the U.S. and abroad who were defrauded by the Next-Gen sweepstakes scheme that affected consumers in dozens of countries, including the United States and Canada.

In total, the FTC is returning almost $25 million to affected consumers including many seniors. The FTC is sending:

  • 221,687 checks totaling $19,180,753 to U.S. and Canadian consumers;
  • 3,516 prepaid Mastercard debit cards totaling $631,322 to consumers in the United Kingdom, which will be hand-delivered by U.K. National Trading Standards, a consumer protection and business safeguards organization; and
  • 19,542 letters to consumers in more than 50 different countries explaining how they can claim their payments via PayPal, which total $4,696,242.

Explore date with the FTC

The deadline for consumers to cash their checks or claim their PayPal payments is October 17, 2022. Debit cards have a two-year expiration date and can be reissued without charge. Recipients who have questions about their refund should contact the refund administrator, Rust Consulting, at 1-833-721-2728 or 1-612-509-2644 or admin@nextgenrefund.com. The Commission never requires people to pay money or provide account information to get a refund.

The FTC’s 2018 complaint against the Next-Gen defendants, filed jointly with the State of Missouri, charged Kevin Brandes, William Graham, C. Floyd Anderson, and corporations under their control with sending tens of millions of deceptive personalized mailers to consumers around the world since 2013. The defendants’ mailers falsely told recipients they had won or were likely to win a substantial cash prize, as much as $2 million, in exchange for a fee ranging from $9.00 to $139.99. Many consumers, including seniors, paid the defendants several times before realizing they had been scammed, according to the complaint.

The FTC appreciates the support provided in this case by the U.K. National Trading Standards Scams Team and our other international partners. Their assistance contributed to the success of the FTC’s case and helped ensure that victims worldwide benefit from this refund program. The FTC relied on key provisions of the U.S. SAFE WEB Act, which allows the FTC to share information with foreign counterparts to combat deceptive and unfair practices that cross national borders.

The FTC’s interactive dashboards for refund data provide country and state level data about refunds in FTC cases. In 2021, Commission actions led to more than $472 million in refunds to consumers across the country, but these refunds were the result of cases resolved before the U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the Commission’s ability to get money back for consumers.



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Federal Trade Commission, National Labor Relations Board Forge New Partnership to Protect Workers from Anticompetitive, Unfair, and Deceptive Practices


The Federal Trade Commission is joining with the National Labor Relations Board (NLRB) in a new agreement that will bolster the FTC’s efforts to protect workers by promoting competitive U.S. labor markets and putting an end to unfair practices that harm workers. The new memorandum of understanding between the two agencies outlines ways in which the Commission and the Board will work together moving forward on key issues such as labor market concentration, one-sided contract terms, and labor developments in the “gig economy.”

“I’m committed to using all the tools at our disposal to ensure that workers are protected from unfair methods of competition and unfair or deceptive practices,” said FTC Chair Lina M. Khan. “This agreement will help deepen our partnership with NLRB and advance our shared mission to ensure that unlawful business practices aren’t depriving workers of the pay, benefits, conditions, and dignity that they deserve.”

 “Workers in this country have the right under federal law to act collectively to improve their working conditions. When businesses interfere with those rights, either through unfair labor practices, or anti-competitive conduct, it hurts our entire nation,” said NLRB General Counsel Jennifer A. Abruzzo. “This MOU is critical to advancing a whole of government approach to combating unlawful conduct that harms workers.”  

The new agreement enables the FTC and the NLRB to closely collaborate by sharing information, conducting cross-training for staff at each agency, and partnering on investigative efforts within each agency’s authority. The FTC is responsible for combatting unfair and deceptive acts and practices and unfair methods of competition in the marketplace. The NLRB is responsible for protecting employees from unfair labor practices which interfere with the rights of employees to join together to improve their wages and working conditions, to organize a union and bargain collectively, and to engage in other protected concerted activity.

The MOU identifies areas of mutual interest for the two agencies, including the extent and impact of labor market concentration; the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; labor market developments relating to the “gig economy” and other alternative work arrangements; claims and disclosures about earnings and costs associated with gig and other work; the impact of algorithmic decision-making on workers; the ability of workers to act collectively; and the classification and treatment of workers. 

The agreement is part of a broader FTC initiative to use the agency’s full authority, including enforcement actions and Commission rulemaking, to protect workers. The FTC has made it a priority to scrutinize mergers that may harm competition in U.S. labor markets. Research shows that these markets are already highly concentrated, and less competitive labor markets can enable firms to harm workers by lowering wages, reducing benefits, and perpetuating precarious or exploitative working conditions. The FTC is working with the Department of Justice to update the agencies’ merger guidelines, looking to provide guidance on how to analyze a merger’s impact on labor markets.

The FTC has also prioritized cracking down on anticompetitive contract terms that put workers at a disadvantage by leaving them unable to negotiate freely over the terms and conditions of their employment. The agency is scrutinizing whether some of these contract terms, particularly in take-it-or-leave-it contexts, may violate the law. At recent open Commission meetings the agency has heard concerns about noncompete clauses that have been imposed on some workers, and as a result it has opened a docket to solicit public comment on the prevalence and effects of contracts that may harm fair competition. It already has taken action to protect workers in several Commission orders, including:

In addition, the agency will continue to take action to stop deceptive and unfair acts and practices aimed at workers; particularly those in the “gig economy” who often don’t enjoy the full protections of traditional employment relationships. The FTC’s actions in this area include:

  • Suing Amazon in 2021 for illegally withholding more than $61 million in tips from drivers for its Amazon Flex program. In that case, the FTC alleged that Amazon had made numerous promises to its drivers that they would receive 100 percent of their tips, but actually withheld tip money from its drivers for years. Amazon agreed to an FTC order requiring them to surrender the full amount owed, which the FTC paid to affected drivers;
  • Suing Uber in 2017 for making deceptive earnings claims to potential drivers as well as deceiving them about the terms of a vehicle leasing program. The FTC alleged that the company touted median income levels in various cities that were greatly exaggerated and advertised lease and purchases prices lower than the prices actually available. Uber agreed to a federal court order requiring them to surrender $20 million that the FTC used to compensate drivers;
  • Suing online lead seller HomeAdvisor, Inc., alleging it used deceptive and misleading tactics in selling home improvement project leads to service providers, including small businesspeople operating in the “gig” economy; and
  • Suing fast-food chain Burgerim, accusing the chain and its owner of enticing more than 1,500 consumers to purchase franchises using false promises while withholding information required by the Franchise Rule.

Workers who believe that their labor rights have been violated can call 1-844-762-6572 for assistance filing an unfair labor practice charge. Or they can contact their closest NLRB Field Office or submit a charge on the NLRB’s website.

The memorandum of understanding was signed by FTC Chair Lina M. Khan and NLRB General Counsel Jennifer A. Abruzzo.



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FTC Details Its Enforcement Actions to Crack Down on Fraud Against the Military Community in Testimony Before House Oversight Subcommittee


The Federal Trade Commission testified before the House Committee on Oversight and Reform Subcommittee on National Security today about the aggressive action the agency is taking to crack down on fraud and related threats against servicemembers and the broader military community.

Testifying on behalf of the Commission, the Associate Director of the FTC’s Division of Financial Practices, Malini Mithal, said fraud against members of the military harms individual members and their families, and undermines military readiness and troop morale. Putting a stop to such nefarious practices is an essential component of the agency’s consumer protection mission, the testimony states. In 2021, the FTC’s Consumer Sentinel consumer complaint database received over 200,000 complaints from military consumers, with reported monetary harm of over $267 million.

According to the testimony, the FTC has responded with enforcement actions combating illegal practices that target military members, including:

  • Illegal auto sales and financing practices. Young servicemembers are an attractive target for unscrupulous auto dealers, and representatives from the Armed Forces have repeatedly expressed concern about unscrupulous and predatory auto sales practices, including “payment packing” (slipping unwanted add-ons into a purchase agreement), bait-and-switch tactics, and extra junk fees.In June the FTC proposed a rule to ban junk fees and bait-and-switch advertising tactics and eliminate the tricks and traps that make it hard or impossible to comparison shop or leave consumers saddled with thousands of dollars in unwanted charges.
  • Phony promises of earnings or investment opportunities. Some companies try to lure military consumers into fraudulent schemes with military-specific discounts or offers. Earlier this year the FTC took action against a fast-food chain BurgerIM that allegedly targeted veterans with false promises while withholding information required by the FTC’s Franchise Rule. According to the complaint, the chain touted veteran-specific discount programs to lure people into paying tens of thousands of dollars in franchise fees. Although BurgerIM pocketed tens of millions of dollars in such fees, the complaint alleges that the majority of those who paid were never able to open restaurants. In a separate case, in April the FTC sent out $23 million in refunds arising out of its action against a company called MOBE Ltd. that allegedly deceived people, with false claims, including through military-specific pitches, that its “proven” 21-step system would enable them to start their own online business and earn substantial income quickly and easily. In reality, the FTC alleged, the system required selling the same memberships to others in the hopes of earning commissions, with many victims experiencing crippling losses or mounting debts.
  • Deceptive claims and recruiting tactics regarding for-profit schools. Some for-profit schools have used deceptive and predatory recruitment methods in marketing themselves to veterans. For-profit schools have also used third party marketers in deceptive campaigns, going as far as to buy leads from marketers who impersonated the military to lure people into enrolling in their schools. Earlier this year the FTC secured $1.2 million in refunds and debt cancellation for students who allegedly were deceived by a for-profit medical school in the Caribbean called the Saint James School of Medicine and its Illinois-based operators. The agency charged that the school deceptively marketed the school’s medical license exam test pass rate and residency matches to lure veterans and other prospective students. 
  • Sham charities that exploit the public’s desire to help veterans. Some scammers exploit the goodwill people have toward the Armed Forces to take advantage of the general public by promoting bogus charities with names like “Help the Vets” and “Veterans of America,” or “American Veterans Foundation” and “Saving Our Soldiers.”

The testimony also notes that challenges remain in protecting consumers from fraud and abuse. Returning money to defrauded consumers has been a cornerstone of the FTC’s enforcement work, including over $403 million in redress to harmed consumers during fiscal year 2021. However, the Supreme Court in AMG Capital Mgmt., LLC v. FTC held that the FTC does not have the ability to obtain monetary relief under Section 13(b) of the FTC Act. Federal legislation restoring the FTC’s ability to provide redress to wronged consumers, including servicemembers and veterans, is critical. In addition, a recent court ruling and ongoing lawsuits may affect the Commission’s ability to continue using its administrative process to obtain refunds for harmed consumers – underscoring the pressing need for a 13(b) fix.

In addition to the Commission’s law enforcement actions, education and outreach is a critical part of the agency’s consumer protection and fraud prevention work, and one area of outreach focus is identity theft, the testimony states. An FTC analysis suggests that active duty servicemembers experience disproportionate instances of theft from their financial accounts compared to the general population. The FTC has done extensive outreach to veterans and also coordinates closely with the Department of Veterans Affairs (VA) to develop and disseminate information about avoiding scams and recovering from ID theft.

The Commission vote to approve the testimony was 5-0.



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FTC Takes Action Against Weber for Illegally Restricting Customers’ Right to Repair


The Federal Trade Commission is taking action against grill maker Weber-Stephen Products, LLC, for illegally restricting customers’ right to repair their purchased products. The FTC’s complaint charges that Weber’s warranty included terms that conveyed that the warranty is void if customers use or install third-party parts on their grill products. Weber is being ordered to fix its warranty by removing illegal terms and recognizing the right to repair and come clean with customers about their ability to use third-party parts.

“This is the FTC’s third right-to-repair lawsuit in as many weeks,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Companies that use their warranties to illegally restrict consumers’ right to repair should fix them now.”

Illinois-based Weber manufactures and sells grills and related products worldwide and offers limited warranties to consumers who buy its products that provide for no-cost repair or replacement, should the products have defects or other issues.

The FTC has made it a priority to protect consumers’ right to repair their products. The Magnuson Moss Warranty Act is one of the FTC’s tools to address repair restrictions. It prohibits a company from conditioning a consumer product warranty on the consumer’s using any article or service which is identified by brand name unless it is provided for free. Following the FTC’s right to repair report Nixing the Fix, the Commission issued a Policy Statement on Repair Restrictions Imposed by Manufacturers pledging to ramp up investigations into illegal repair restrictions. The FTC recently announced complaints and orders against Harley-Davidson and the maker of Westinghouse outdoor generators for similar issues.

According to the FTC’s complaint, Weber imposed illegal warranty terms that voided customers’ warranties if they used or installed any third-party parts on their grill products. The FTC alleges that these terms harm consumers and competition in multiple ways, including:

  • Restricting consumers’ choices: Consumers who buy a product covered by a warranty do so to protect their own interests, not the manufacturer’s. Weber’s warranty improperly implied that as a condition of maintaining warranty coverage, consumers had to use the company’s parts.
  • Costing consumers more money: By telling consumers their warranty will be voided if they choose third-party parts, Weber forced consumers to use potentially more expensive options provided by Weber itself. This violates the Warranty Act, which prohibits these clauses unless a manufacturer provides the required parts for free under the warranty or is granted an exception from the FTC.
  • Undercutting independent businesses: The Warranty Act’s tying prohibition protects not just consumers, but also independent repairers and the manufacturers of aftermarket parts. By conditioning its warranty on the use of Weber-branded parts, Weber infringed the right of independent repairers and manufacturers to compete on a level playing field. 
  • Reducing resiliency: Robust competition from aftermarket part manufacturers is critical to ensuring that consumers get the replacement parts they need when they need them and are not at the mercy of branded part supply chains. More resilient and repairable products also lead to less waste in the form of products that could otherwise be fixed. 

Enforcement Actions

Under the FTC Act and the Warranty Act, the FTC has the authority to take action against companies violating consumer protection laws, including those engaging in unfair or deceptive acts or practices. The FTC’s order in this case:

  • Prohibits further violations: Weber will be prohibited from further violations of the Warranty Act. They will also be prohibited from telling consumers that their warranties will be void if they use third-party parts, or that they should only use Weber-brand parts. If the company violates these terms, the FTC will be able to seek civil penalties of up to $46,517 per violation in federal court.
  • Recognizes consumers’ right to repair: Weber will be required to add specific language to its warranty saying, “Using third-party parts will not void this warranty.”
  • Comes clean with consumers: Weber must send and post notices informing customers that their warranties will remain in effect even if they use or install third-party parts on their Weber grill products.

The Commission vote to issue the administrative complaint and to accept the consent agreement was 5-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments appear in the published notice. Once processed, comments will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $46,517.



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FTC Seeks Public Comment on Amplifier Rule Amendments to Make Testing Methods More Useful to Consumers


The Federal Trade Commission seeks public comment on its Amplifier Rule (formally known as the Rule Relating to Power Output Claims for Amplifiers Utilized in Home Entertainment Products). First, to help consumers make apples to apples comparisons about sound quality, the Commission proposes requiring that sellers use uniform testing methods before they advertise power output levels. Second, for multichannel home theater amplifiers, the Commission seeks comment about how to set test conditions to reflect typical consumer use.

“Clear choices for consumers and a level playing field for manufacturers are critical in today’s marketplace,” said Samuel Levine, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “This request for comment on amendments to the Amplifier Rule will help the FTC foster those safeguards in the audio industry.” 

The Amplifier Rule requires uniform measurements and disclosures for home entertainment amplifiers so consumers can easily compare amplifier characteristics. It was enacted by the FTC in 1974 in response to amplifier advertisements that relied on widely disparate and, at times, deceptive testing methods, leaving consumers without a way to reliably shop for amplifiers. The Rule was last reviewed and revised in 2008.

As detailed in a notice of proposed rulemaking that will be published shortly, the FTC is currently in the process of reviewing the Rule, and has issued a Federal Register notice seeking comments regarding public support for the rule and proposed changes or modifications the FTC should consider. Commenters overwhelmingly support the rule, but some have recommended amendments. After evaluating the comments received, the FTC is now seeking additional comments on:

  • whether the Commission should amend the Rule to simplify power output measures by standardizing the test parameters used by amplifier sellers as follows: a load impedance of 8 ohms, a power band of 20 Hz to 20 kHz, and a THD limit of less than 0.1%; and
  • the parameters of consumers’ normal use of multichannel home theater amplifiers.

The Commission vote approving publication of the notice of proposed rulemaking was 5-0. It will be published in the Federal Register shortly. Written comments must be received within 60 days of the date the notice is published. Comments can be filed electronically at https://www.regulations.gov.



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