October 2023

The Federal Trade Commission is seeking public comments on the costs, benefits, necessity, and regulatory and economic impact of its Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles (AFVs), also called the Alternative Fuels Rule, including issues related to electric vehicle charging stations.

The FTC is conducting this review as part of its ongoing, systematic review of all agency rules and guides. With this request for comment, the FTC is starting a new review of the rule. The FTC first published the Alternative Fuels Rule in 1995 as directed by the Energy Policy Act of 1992. To enable consumers to make informed buying decisions, the rule requires informative labels on fuel dispensers for non-liquid alternative fuels, such as electricity, compressed natural gas, and hydrogen. The Commission completed its most recent review of the rule 10 years ago, and as part of that process, eliminated separate FTC labeling requirements for AFVs such as electric cars, and, in their place, incorporated the Environmental Protection Agency’s (EPA) fuel economy labeling requirements into the rule.

In addition to seeking comments on general questions about the rule, the FTC now seeks comments on specific issues related to electric vehicle charging stations. The Federal Register notice announcing the request for public comments includes specific questions about labeling for electric vehicle charging stations operated by retailers for consumers. It details the current rule’s requirements regarding disclosures on all public electric vehicle (EV) charging stations and seeks input on whether, among other things, the FTC should make any changes to the content of the current EV charging stations label, what types of information the labels should disclose, and where they should appear.

Instructions for filing comments will be included the published notice. Comments must be received 60 days after the notice is published in the Federal Register. Once processed, comments will be posted on Regulations.gov. Consumers also may submit comments in writing by following the instructions in the “Supplementary Information” section of the notice. Comments must be received within 60 days after the request in published in the Federal Register.

The Commission vote approving publication of the request for public comments in the Federal Register was 3-0.

The primary staffer on this matter is Hampton Newsome in the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission has submitted two reports to Congress detailing the agency’s efforts to combat cross-border fraud through the U.S. SAFE WEB Act and work contributing to the fight against ransomware and other cyber attacks that originate outside the United States.

The first report provides an update on the FTC’s efforts to implement the Undertaking Spam, Spyware, And Fraud Enforcement With Enforcers Beyond Borders Act, or U.S. SAFE WEB Act (SAFE WEB). The second report, which was required by the Reporting Attacks from Nations Selected for Oversight and Monitoring Web Attacks and Ransomware from Enemies Act (RANSOMWARE Act), addresses questions about FTC activities concerning China, Russia, North Korea, and Iran and the FTC’s efforts to combat ransomware—a type of cyber-related attack in which bad actors hold data or computer access hostage until they receive payment— and other types of cyber attacks. 

SAFE WEB, passed by Congress in 2006, provides a framework to engage in cross-border assistance, including information sharing and investigative support. As the report notes, the law has been an indispensable tool in helping the FTC combat cross-border fraud and protect consumers in an increasingly global and digital economy. Thirty years ago, less than 1% of fraud reported to the FTC was cross border, while in 2022 more than 11% of complaints were cross border.

With the authority provided by SAFE WEB, the FTC has pursued and stopped harmful conduct in the United States and successfully defended against challenges to its jurisdictional authority over foreign companies targeting American consumers. The FTC has also worked with numerous foreign enforcers to stop cross-border injury and frauds.

SAFE WEB was reauthorized by Congress in 2020 for seven years. In the new report, the Commission urges Congress to permanently reauthorize SAFE WEB by removing the sunset provision currently set to expire on September 30, 2027, thus preserving the agency’s ability to effectively cooperate with foreign law enforcement to protect consumers. The report also reiterates the FTC’s call for Congress to restore the agency’s ability to get money back to consumers harmed by unlawful conduct and to prevent bad actors from profiting from their misconduct. The FTC’s authority to do so was severely hampered by the Supreme Court’s 2021 AMG decision.

Report on Ransomware and other Cyber Attacks

The second report details the FTC’s work to target ransomware and other cyber attacks. The report notes that one of the key ways the FTC has done this is by implementing a robust data security enforcement program aimed at ensuring companies take appropriate steps to protect personal data they hold from such attacks. The FTC has brought more than 80 enforcement actions involving data security. The agency also has pursued bad actors involved in ransomware-related tech support scams and worked to educate the public and businesses on how to secure and protect data from cyber attacks.

Only a small fraction of the millions of complaints the FTC receives each year involve ransomware and other cyber attacks, and these complaints rarely mention Iran, North Korea or Russia, according to the report. While China is the leading source of complaints about cross-border fraud, they rarely relate to ransomware and other cyber attacks, the report notes. The report details enforcement actions, mostly involving privacy and data security, the FTC has taken involving known or unverified connections to China and Russia.

The report reiterates the importance of SAFE WEB in helping to combat ransomware and other cyber attacks. The Commission also urges Congress to enact privacy and data security legislation, enforceable by the FTC, asserting that such legislation would advance the security of the United States and U.S. companies against ransomware and other cyber attacks.

The Commission votes to approve each report were 3-0.

The lead staffers on both reports are Stacy Procter and Angel Martinez in the FTC’s Office of International Affairs.

The Federal Trade Commission and State of Wisconsin are taking action against Wisconsin auto dealer group Rhinelander Auto Center, its current and former owners, and general manager Daniel Towne for deceiving consumers by tacking hundreds or even thousands of dollars in illegal junk fees onto car prices and for discriminating against American Indian customers by charging them higher financing costs and fees.

The defendants have agreed to proposed court orders that will require Rhinelander’s current owners and Towne to stop their unlawful practices and provide $1.1 million to be used for refunds to consumers.

“Working closely with the State of Wisconsin, we are holding these dealerships accountable for discriminating against American Indian customers and sneaking junk fees onto consumers’ bills,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “A vehicle is one of the most expensive purchases families make, and we are fully committed to ensuring that all consumers navigating the car-buying process can do so without facing unlawful discrimination or paying for products and services they do not want.”

“Companies must not be permitted to engage in discriminatory practices or improperly charge customers for ‘add-on’ products or services,” said Wisconsin Attorney General Josh Kaul. “Thank you to those at Wisconsin DOJ, the FTC, and other agencies whose work led to the filing of this complaint.”

In their complaint, the FTC and Wisconsin DOJ say that Rhinelander and Towne regularly charged many of their customers junk fees for “add-on” products or services without their consent. The complaint cites one survey of Rhinelander customers that shows half of the dealer’s customers said they were charged for add-ons without authorization or through deception. One consumer was told—deceptively—that Guaranteed Asset Protection (commonly referred to as “GAP,” or “GAP insurance”) was required for her car purchase, even though she didn’t want to buy it; it cost her more than $1,000 in fees and additional interest on her loan.

Rhinelander and Towne discriminated against American Indian customers in the cost of financing by adding more “markup” to their interest rates, according to the FTC’s complaint. This additional markup cost American Indian customers $401 more on average compared to non-Latino white customers. The complaint also notes that, since Rhinelander changed ownership in 2019, the disparity has only increased.

In addition, the complaint alleges that American Indian customers were charged for unwanted add-ons at a higher rate than non-Latino white customers. These additional junk fees can significantly drive up the amount that customers finance when they purchase their vehicle, which in turn leads to higher cost over the life of the loan. In total, American Indians paid on average approximately $1,362 more for add-ons in credit transactions than non-Latino White customers since 2016, and $1,374 more since the new ownership took over, according to the complaint.

The proposed settlement with Rhinelander’s current owners and Towne will require the company to stop deceiving consumers about whether add-ons are required for a purchase and obtain consumers’ express informed consent before charging them for add-ons. The settlement will also the require the defendants to establish a comprehensive fair lending program that, among other components, will allow consumers to seek outside financing for a purchase and cap the additional interest markup Rhinelander can charge consumers. The current owners and Towne will also be required to pay $1 million to be used to refund affected consumers.

The former owners, Rhinelander Auto Center, Inc. and Rhinelander Motor Company, have agreed to a separate settlement that would require the companies to permanently wind down the businesses and pay $100,000 to be used to refund affected consumers.

The Commission vote to authorize FTC staff to file the complaint and to approve the proposed stipulated final orders was 3-0. The complaint and proposed final orders were filed in the U.S. District Court for the Western District of Wisconsin.

In addition to its partnership with the Wisconsin Department of Justice in this case, the FTC also thanks Wisconsin’s Department of Transportation; Department of Financial Institutions; and Department of Agriculture, Trade and Consumer Protection, as well as the Better Business Bureau of Wisconsin, for their assistance with this matter.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent judgments have the force of law when approved and signed by the District Court judge.

The FTC attorneys on this matter are Nathan Nash, Rachel Sifuentes and Rachel Granetz of the FTC’s Midwest Region.

The settlement with the State of Wisconsin is dependent on approval by Wisconsin’s Joint Committee on Finance per the requirements of 2017 Wisconsin Act 369.

The Federal Trade Commission sued to stop four related defendants from deceptively marketing their 1 Virus Buster Invisible Mask

(Invisible Mask) that purportedly creates a three-foot barrier of protection against 99.9 percent of all viruses and bacteria, including COVID-19 – without any scientific proof that the product actually works.

Despite receiving a warning letter that the FTC sent in July 2020, the New York-based defendants continued falsely advertising the Invisible Mask—a badge worn around the neck—as a scientifically proven defense against COVID-19 and other diseases and that it was a government-approved device, according to the FTC’s complaint.

Three of the four defendants have agreed to a proposed order settling the FTC’s complaint, and will be banned from making unsupported health claims for products designed to prevent or treat COVID-19.

“The defendants’ claims that their products can stand in for approved COVID-19 vaccines are bogus,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will use every tool it has at its disposal to stop false and unsubstantiated health claims that endanger consumers.”

The complaint alleges defendants Gary Kong, Timothy Wetzel, and the two companies they operate, K W Technology Inc. and K W Technology NV Inc., violated the FTC Act and the Covid Consumer Protection Act through their marketing and sale of the Invisible Mask on their own website, YouTube, and Facebook, where it was called “The 1 Virus Buster Card.”

This card, which was worn around the neck or clipped onto clothing, was sold using deceptive claims, the FTC says. For example, the defendants claimed their product “uses quantum theory technology, combines known virus and bacteria killing compounds. It is safe, simple, and effective. All you need to do is hang it around your neck or attach it to your collar, close to your mouth and nose. . . it kills 99.9% of most harmful bacterial and viruses . . . within a three-foot radius.”

The FTC contends the defendants have no reliable scientific evidence to support their claims that the Invisible Mask can prevent any human disease, and that despite contacting the FTC after receiving the warning letter and vowing to stop making such claims, they simply continued deceptively marketing the product.

The complaint also alleges the defendants falsely claimed that the Invisible Mask or its materials are government approved or made in a government-approved facility. They also falsely claimed the Invisible Mask had “FDA Approval” and that that the materials used to make it are “EPA-approved.” On their website the defendants posted a phony “Certificate of Registration” with the FDA’s logo, despite the fact that no such agency certificate exists.

The Kong Proposed Order

Three of the defendants have agreed to settle the FTC’s complaint in this case. A proposed court order will ban defendants Kong and his two companies, K W Technology Inc. and K W Technology NV Inc., from advertising, promoting, or selling any product claiming to prevent or treat COVID-19, unless the claims are true and supported by scientific evidence. The order also will bar the defendants from making any health-related product claims unless they have scientific evidence that the claim is true and from making misrepresentations about products’ health benefits, performance, efficacy, safety, or side effects.

The order also prohibits the defendants from misrepresenting they have government approval, clearance, or authority for their products and product claims. Finally, it requires the payment of $150,000.

The Commission voted 3-0 to file the complaint and proposed stipulated order against defendants Kong, K W Technology Inc. and K W Technology NV Inc. The FTC filed the documents in the U.S. District Court for the Eastern District of New York. Litigation continues against defendant Wetzel, who did not agree to the proposed settlement.

The lead attorney on the matter is Robin L. Rock of the FTC’s Southeast Region.