The Federal Trade Commission was selected as president of the International Consumer Protection and Enforcement Network (ICPEN) for 2024-25 during a meeting this week in Sydney, Australia.

The FTC’s presidency will follow the presidency of Poland’s Office of Competition and Consumer Protection.

The meeting focused on exchanging experiences and identifying effective practices in combating cross-border fraud and promoting consumer protection around the world.

ICPEN is an international network of consumer protection authorities from more than 70 countries that aims to protect consumers’ economic interests around the world by sharing information and encouraging global cooperation among law enforcement agencies.

The Federal Trade Commission sued to stop a Voice over Internet Protocol (VoIP) provider, XCast Labs, Inc., that continued to funnel hundreds of millions of illegal robocalls through its network, even after receiving multiple warnings. The Department of Justice filed the complaint in the Central District of California on the FTC’s behalf.

“XCast Labs played a key role in helping telemarketers flood homes with unlawful robocalls, including robocalls impersonating the Social Security Administration,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “VoIP providers like XCast Labs that bury their heads in the sand when their customers use their services to break the law can expect to hear from the FTC.”      

XCast Labs, headquartered in Los Angeles, California, is a nationwide provider of VoIP technology, providing services that allow its customers to send and receive phone calls, including robocalls (calls that play a prerecorded message), over the Internet. Telemarketers who blast illegal robocalls typically use VoIP service providers like XCast Labs to transmit their calls.

According to the complaint, in January 2020, the FTC sent letters to a number of VoIP providers, including XCast Labs, warning them that assisting and facilitating illegal telemarketing or robocalling was against the law. The complaint also alleges that XCast Labs received dozens of “traceback” inquiries from US Telecom’s Industry Traceback Group regarding suspected illegal calls that originated on XCast Labs’ network, as well as inquiries from law enforcement agencies about transmission of suspected illegal traffic on the XCast Labs network. Even after receiving these direct warnings, the FTC alleges that XCast Labs transmitted illegal robocalls to consumers.

In addition, the FTC discovered that many of these suspect robocalls were part of organized campaigns designed to generate telemarketing leads by, for example, impersonating federal officials from the Social Security Administration. Lead generators sell the information they gather to telemarketers, who then use consumers’ information to pester them with even more unwanted, illegal calls.

The Commission vote authorizing the staff to refer the complaint to the Department of Justice for filing was 4-0, and was taken before Commissioner Christine S. Wilson left the FTC. The DOJ filed the complaint in the U.S. District Court for the Central District of California. Thomas Biesty and Frances Kern of the Bureau of Consumer Protection were the primary FTC staff on this matter.

NOTE: The Commission refers a complaint for civil penalties to the DOJ for filing when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. The case will be decided by the court.

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, May 18, 2023. The open meeting will commence at 11am ET and will begin with time for members of the public to address the Commission.

The following items will be on the tentative agenda for the May 18 Commission meeting:

Business Before the Commission

Policy Statement on Biometric Information and Section 5 of the FTC Act: The Commission will vote to issue a Policy Statement on biometric information and Section 5 of the FTC Act. The Policy Statement will list examples of some of the practices the Commission will scrutinize in determining whether companies collecting and/or using or marketing biometric information technologies are complying with Section 5 of the FTC Act.

Notice of Proposed Rulemaking to Amend the Health Breach Notification Rule: The Commission will vote to issue a Notice of Proposed Rulemaking to amend the Health Breach Notification Rule, which requires vendors of personal health records and related entities to notify consumers of the breach of their unsecured identifiable health information. The proposed amendments would help clarify technologies and entities covered by the Rule, facilitate greater electronic breach notices to consumers, and expand the required content of the notices, among other changes.

At the start of the meeting, Chair Khan will offer brief remarks and will then invite members of the public to share feedback on the Commission’s work generally and bring relevant matters to the Commission’s attention. Members of the public must sign up for an opportunity to address the Commission virtually at the May 18 event.

Each commenter will be given two minutes to share their comments. Those who cannot participate during the event may submit written comments or a link to a prerecorded video through a webform. Speaker registration and comment submission will be available through Tuesday, May 16, 2023 at 8 pm ET.

The FTC’s public meeting agendas will be posted on the Commission’s website at least seven days prior to the Commission’s next monthly meeting. A link to the event will be available on the day of the event, shortly before the meeting starts via FTC.gov. The event will be recorded, and the webcast and any related comments will be available on the Commission’s website after the meeting. The Commission retains discretion to make public comments available following the event on ftc.gov.

The Federal Trade Commission released the tentative agenda for its May 23 workshop in Washington, DC, which will examine the Commission’s guidance on “recyclable” advertising claims as part of its ongoing review of the Guides for Use of Environmental Marketing Claims (Green Guides). The workshop, Talking Trash: Recyclable Claims and the Green Guides, is free and open to the public, and pre-registration is not required.

In-person registration will begin at 7:45 am, followed by a welcome and opening remarks by James Kohm, Associate Director of the Enforcement Division within the FTC’s Bureau of Consumer Protection.

The half-day event will feature three panel discussions featuring a range of stakeholders. The panel discussions will focus on:

• The Current State of the Recycling Market and Claims: This session will include discussion of current conditions in the consumer recycling space, operation of recycling programs, markets for recyclable products, and advertising claims.

• Consumer Perception of Recycling Claims: This session will explore available evidence of how consumers understand “Recyclable” advertising claims.

• The Future of the Green Guides: This session will build on the previous sessions to analyze whether changes or updates are needed to ensure the Green Guides continue to provide accurate guidance to marketers on how to avoid making deceptive “Recyclable” claims.

The event will be webcast on the FTC’s website, www.ftc.gov. Registration is not required to watch the webcast. In conjunction with this event, the Commission is seeking additional public comment. The public will have until June 13, 2023 to submit comments to accommodate those who wish to provide input on the topics discussed at the event. Information on how to submit comments can be found on Regulations.gov.

The Federal Trade Commission has stopped a pair of student loan debt relief schemes that it says bilked students out of approximately $12 million by using deceptive claims about repayment programs and loan forgiveness that did not exist. The agency also says the companies falsely claimed to be or be affiliated with the Department of Education and told students that the illegal payments the companies collected would count towards their loans.

The FTC notes that one of the companies and its owners also violated the COVID-19 Consumer Protection Act by misrepresenting that their program was part of the CARES Act or a similar COVID-19 relief program.

“As Americans struggle with massive student loan debt and uncertainty around the prospect of forgiveness, scammers are looking to cash in,” said Samuel Levine, Director of FTC’s Bureau of Consumer Protection. “These lawsuits to shut down student loan debt relief schemes continue the agency’s crackdown on junk fees, unwanted calls, and financial exploitation.”

According to the FTC’s complaints, since at least 2019, SL Finance LLC and its owners Michael Castillo and Christian Castillo, and BCO Consulting Services Inc. and SLA Consulting Services Inc. and their owners Gianni Olilang, Brandon Clores, Kishan Bhakta, and Allan Radam have lured consumers looking to pay down their student loans, many of whom are low-income borrowers saddled with tens of thousands of dollars of student debt, into paying hundreds to thousands of dollars in illegal upfront fees. According to the complaints, the defendants tricked consumers into believing they were enrolled in a legitimate loan repayment program, that their loans would be forgiven in whole or in part, and that most or all of consumers’ payments to the companies would be applied to their loan balances. In reality, the defendants were pocketing students’ payments, according to the FTC’s complaint.

The agency also charges that the defendants falsely claimed to be or be affiliated with the Department of Education, and that they would take over servicing for students’ loans. Both complaints note that the misrepresentations by defendants about their purported debt relief services violated Section 5 of the FTC Act and the Telemarketing Sales Rule (TSR). Both complaints also note that the companies have violated the TSR by collecting advance fees for debt relief services and violated the Gramm-Leach-Bliley Act by using deceptive tactics to obtain consumers’ financial information. Lastly, SL Finance LLC and its owners violated the TSR by calling consumers who had signed up for the Do Not Call Registry and by failing to pay required Do Not Call Registry fees.

After the FTC filed complaints seeking to end the deceptive practices, a federal court temporarily halted the two schemes and froze the assets of SL Finance LLC and its owners  and BCO Consulting and SLA Consulting and their owners.

The Commission votes authorizing the staff to file the complaints were 3-0. The U.S. District Court for the Central District of California entered temporary restraining orders in the two cases on May 2, 2023 and May 3, 2023.

NOTE: The Commission files 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. The case will be decided by the court.

The lead staff attorneys on this matter are Katherine Aizpuru and Samuel Jacobson of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission released the tentative agenda for its May 18 workshop in Washington, DC, which will examine proposed changes to its Ophthalmic Practice Rules, also known as the Eyeglass Rule. The workshop, A Clear Look at the Eyeglass Rule, is free and open to the public, and pre-registration is not required.

In-person registration will begin at 7:45 am, followed by a welcome and opening remarks by Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.

The half-day event will feature three panel discussions focused on:

• Prescription Release: The FTC recently sent cease-and-desist letters to prescribers of eyeglasses and contact lenses based on consumer complaints that patients were not automatically given, or denied, or charged for their prescriptions. This panel will consider the need for the Eyeglass Rule’s prescription release requirement in today’s marketplace.

• Examining the Confirmation Requirement and Lessons Learned from the Contact Lens Rule: Panelists will discuss how the confirmation of contact lens prescription release is working in practice: What methods are prescribers using to fulfill their obligations to obtain a signed confirmation and keep a record of it for three years; are there any options for easing the burden of this requirement; and what compliance issues have arisen?  The event will also feature a presentation from a practicing optometrist discussing how the confirmation requirement for contact lenses is being implemented.

• Other Proposed Rule Changes: The FTC is considering three other amendments to the rule — allowing prescribers, with a patient’s verifiable affirmative consent, to provide the patient with a digital copy of a prescription in lieu of a paper copy; clarifying that a patient’s proof of insurance coverage is considered payment for the purpose of determining when a prescription must be provided; and changing the term “eye examination” to “refractive eye examination” throughout the rule.

The event will be webcast on the FTC’s website, www.ftc.gov. Registration is not required to watch the webcast. Information on the panelists and other speakers can be found on the event page. The public will have until June 20, 2023, to submit public comments on the topics that will be discussed at the event.

The Federal Trade Commission is sending 11,446 checks and 66 PayPal payments, totaling more than $176,000, to consumers who bought clothing and accessories from Lions Not Sheep. The company was charged with using deceptive ‘Made in USA’ labels and advertising on clothing and accessories imported from other countries. Each of the payments is $15.30.

Consumers who receive checks should cash them within 90 days, as indicated on the check. Recipients who have questions about their refund should call the refund administrator, Analytics, at 1-855-620-9529, or visit the FTC website to view frequently asked questions about the refund process. The Commission never requires people to pay money or provide account information to get a refund.

According to the FTC’s May 2022 complaint, Lions Not Sheep Products, LLC, and its owner Sean Whalen deceptively advertised clothing and accessories as Made in USA. In most cases, the products advertised using these claims consisted of wholly imported shirts and hats with limited finishing work performed in the United States. An administrative order settling the Commission’s complaint barred the company and its owner from advertising and labeling its clothes and accessories as made in the United States when they are not. It also required the defendants to pay money to provide refunds to defrauded consumers.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of Commission refunds. In 2022, Commission actions led to more than $392 million in refunds to consumers across the country.

The Federal Trade Commission will hold a virtual panel discussion on May 11, 2023 with a diverse set of experts to discuss the business practices of cloud computing providers including issues related to security, competition, and emerging technology issues associated with cloud computing. 

Cloud computing is used by a wide range of industries for on-demand access to data storage, servers, networks and more, and is increasingly central to the economy.

FTC staff is currently seeking public comment on these and other cloud-related issues outlined in its Request for Information, as well as the impact of cloud computing on specific industries including healthcare, finance, transportation, e-commerce, and defense. The staff announced that the deadline to submit comments has been extended by 30 days until June 21.

FTC Chair Lina M. Khan will provide opening remarks before the panel discussion begins. A full list of panelists will be posted on the event page  prior to the event.

The event will begin at 1 p.m. ET and will be webcast at www.ftc.gov.

The event is free and open to the public. Registration is not required to watch the webcast. More information about the discussion can be found on the event page.

The Federal Trade Commission proposed changes to the agency’s 2020 privacy order with Facebook after alleging that the company has failed to fully comply with the order, misled parents about their ability to control with whom their children communicated through its Messenger Kids app, and misrepresented the access it provided some app developers to private user data.

“Facebook has repeatedly violated its privacy promises,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The company’s recklessness has put young users at risk, and Facebook needs to answer for its failures.”

As part of the proposed changes, Meta, which changed its name from Facebook in October 2021, would be prohibited from profiting from data it collects, including through its virtual reality products, from users under the age of 18. It would also be subject to other expanded limitations, including in its use of facial recognition technology, and required to provide additional protections for users.

This is the third time the FTC has taken action against Facebook for allegedly failing to protect users’ privacy. The Commission first filed a complaint against Facebook in 2011, and secured an order in 2012 barring the company from misrepresenting its privacy practices. But according to a subsequent complaint filed by the Commission, Facebook violated the first FTC order within months of it being finalized – engaging in misrepresentations that helped fuel the Cambridge Analytica scandal. In 2019, Facebook agreed to a second order—which took effect in 2020—resolving claims that it violated the FTC’s first order. Today’s action alleges that Facebook has violated the 2020 order, as well as the Children’s Online Privacy Protection Act Rule (COPPA Rule).

The 2020 privacy order required Facebook to pay a $5 billion civil penalty. The 2020 order also expanded the required privacy program, as well as the independent third-party assessor’s role in evaluating the effectiveness of Facebook’s program. For example, the 2020 order required Facebook to conduct a privacy review of every new or modified product, service, or practice before implementation and document its risk mitigation determinations. The order also required Facebook to implement greater security for personal information, and imposed restrictions on the use of facial recognition and telephone numbers obtained for account security.

The independent assessor, tasked with reviewing whether the company’s privacy program satisfied the 2020 order’s requirements, identified several gaps and weaknesses in Facebook’s privacy program, according to the Order to Show Cause, in which the Commission notes that the breadth and significance of these deficiencies pose substantial risks to the public.

The Order to Show Cause also alleges that Facebook violated both the 2012 and 2020 orders by continuing to give app developers access to users’ private information after promising in 2018 to cut off such access if users had not used those apps in the previous 90 days. In certain circumstances, Facebook continued to allow third-party app developers to access that user data until mid-2020.

In addition, the FTC has asked the company to respond to allegations that, from late 2017 until mid-2019, Facebook misrepresented that parents could control whom their children communicated with through its Messenger Kids product. Despite the company’s promises that children using Messenger Kids would only be able to communicate with contacts approved by their parents, children in certain circumstances were able to communicate with unapproved contacts in group text chats and group video calls. The FTC says these misrepresentations violated the 2012 order, the FTC Act and the COPPA Rule. Under the COPPA Rule, operators of websites or online services that are directed to children under 13 must notify parents and obtain their verifiable parental consent before collecting personal information from children.

The proposed changes to the 2020 order, which would apply to Facebook and Meta’s other services such as Instagram, WhatsApp, and Oculus, include:

• Blanket prohibition against monetizing data of children and teens under 18: Meta and all its related entities would be restricted in how they use the data they collect from children and teens. The company could only collect and use such data to provide the services or for security purposes, and would be prohibited from monetizing this data or otherwise using it for commercial gain even after those users turn 18.

• Pause on the launch of new products, services: The company would be prohibited from releasing new or modified products, services, or features without written confirmation from the assessor that its privacy program is in full compliance with the order’s requirements and presents no material gaps or weaknesses.

• Extension of compliance to merged companies: Meta would be required to ensure compliance with the FTC order for any companies it acquires or merges with, and to honor those companies’ prior privacy commitments.

• Limits on future uses of facial recognition technology: Meta would be required to disclose and obtain users’ affirmative consent for any future uses of facial recognition technology. The change would expand the limits on the use of facial recognition technology included in the 2020 order.

• Strengthening existing requirements: Some privacy program provisions in the 2020 order would be strengthened, such as those related to privacy review, third-party monitoring, data inventory and access controls, and employee training. Meta’s reporting obligations also would be expanded to include its own violations of its commitments.

Today’s action is the first step in the process. In seeking modifications to the 2020 order, the FTC has formally asked Meta to respond in 30 days to the proposed findings from the agency’s investigation. The proposed order modifications are based on the agency’s authority under Section 5(b) of the FTC Act and Commission Rule 3.72, which allow the Commission to reopen an administrative case and modify a final order when the Commission finds “changed conditions of fact or law or [when the] public interest” may require such action.

The Commission voted 3-0 to issue the Order to Show Cause. Commissioner Alvaro Bedoya released a statement.

NOTE: The Commission’s issuance of its Order to Show Cause marks the beginning of a proceeding in which Meta will have an opportunity to respond. After carefully considering the facts and any arguments by the parties, the Commission will ultimately determine whether modification of the 2020 order is in the public interest or justified by changed conditions of fact or law.

The lead staff attorneys on this matter are Reenah Kim, Evan Mendelson, and Olivia Jerjian from the FTC’s Bureau of Consumer Protection.