Following a public comment period, the Federal Trade Commission has approved a petition by Gilbarco, Inc. a fuel dispenser pump manufacturer. In June 2022, the company requested a partial exemption from the FTC’s Fuel Rating Rule, which, among other things, requires retailers of automotive fuel to post the automotive fuel rating of all automotive fuel sold to consumers.

The partial exemption approved today will allow Gilbarco to make small reductions in the type and size of fuel labels to allow room for an additional fuel grade button on its pumps. The FTC has published a Federal Register notice containing the petition.

The FTC implemented the Fuel Rating Rule under the Petroleum Marketing Practices Act in 1979. The law establishes uniform automotive fuel ratings and labeling standards, including octane content information, which provide consumers with the information they need to make informed choices at the gas pump. The Rule also defines how ethanol content should be displayed on fuel rating labels.

Gilbarco is one of the largest manufacturers of fuel dispensers in the United States, and three times since 1988, the FTC has approved similar petitions by the company related to proposed fuel label changes. In the petition, the company requested permission to make small reductions to:

• The type of “XX% Ethanol” and “Flex-Fuel Vehicles” ethanol labels;

• The type and letter spacing for the words “Minimum Octane Rating” on octane labels; and

• The width of labels for gasoline and five other types of fuels.

The Commission vote approving publication of the Federal Register notice was 5-0, with Commissioner Christine S. Wilson issuing a separate concurring statement. The FTC received no public comments regarding Gilbarco’s petition for the partial exemption.

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, October 20, 2022. The open meeting will commence at 1pm 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 October 20th Commission meeting:

Business Before the Commission:

Advance Notice of Proposed Rulemaking on Junk Fees: The Commission will vote on whether to issue an Advance Notice of Proposed Rulemaking to initiate a rulemaking proceeding addressing junk fees that are charged for goods or services that have little or no added value to the consumer. The ANPR seeks comment on the prevalence of junk fees and the consumer harms arising from junk fee practices, among other questions.

Advance Notice of Proposed Rulemaking on Fake Reviews and Endorsements: The Commission will vote on whether to issue an Advance Notice of Proposed Rulemaking to initiate a rulemaking proceeding addressing fake reviews and other endorsements, which can cheat consumers and honest businesses alike. The ANPR seeks comment on the prevalence of fake and deceptive reviews and the consumer harms arising from them, among other questions.

Advance Notice of Proposed Rulemaking on the Funeral Rule and Staff Report “Shopping for Funeral Services Online”: The Commission will vote on whether to retain the Funeral Industry Practices Rule and issue an Advance Notice of Proposed Rulemaking seeking comment on potential updates to modernize the rule, including improvements to the public accessibility of funeral home price information. The Commission will also vote on issuing a staff report that summarizes the results of their review of almost 200 funeral provider websites.

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 October 20 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 October 18 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 October 20, 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 won a court order against F & G International Group Holdings, LLC, FG International, LLC, (FGI) and their principal J. Glenn Davis after suing the company and its CEO for deceptively claiming their paint insulates, when it does not. The order from the U.S. Court for the Southern District of Georgia permanently bans FGI from making deceptive claims and prohibits them from supporting similar deception from other companies.

“At a time of high energy prices and deep concern about inflation, today’s ruling shows the impact FTC cases are having on issues of vital economic importance to American consumers,” said Sam Levine, Director of the FTC’s Bureau of Consumer Protection.

Georgia-based FGI sells paint products for buildings and other structures. In advertising its insulating paint, FGI played to consumers’ concerns about rising energy costs, stating that their product “provides excellent insulation” at an “extreme insulation value.” In reality, FGI’s insulating paint provided far less protection than the company claimed and end users of the product received none of the insulation FGI promised.

In issuing the opinion and order the court found that the FGI defendants harmed consumers, including small businesses, by:

• Making False Claims. FGI baselessly claimed that their insulation coating was more than thirty times more effective than its actual value;

• Misrepresenting Data. FGI claimed that testing supported the insulation value of their paints when it did not; and

• Inducing Customers with False Insulation Claims. FGI made these false claims and misrepresentations in a way that was important in buying decisions and induced purchases by customers.

The order prohibits the defendants behind FGI from helping anyone else make misleading claims about insulation ratings or the energy efficiency that any product will provide.

The U.S. District Court for the Southern District of Georgia, Statesboro Division, entered the opinion and permanent injunction.

Following a public comment period, the Federal Trade Commission has updated its Energy Labeling Rule in order to allow consumers to more accurately compare the estimated annual energy consumption of appliances before they buy them.

The FTC’s Energy Labeling Rule, issued in 1979 under the Energy Policy and Conservation Act, requires that manufacturers attach labels to major home appliances and other consumer products that help consumers compare the energy usage and costs of competing models. The labels contain three primary disclosures for most covered products: 1) estimated annual operating cost, 2) a “comparability range” showing the highest and lowest energy consumption or efficiencies for all similar models, and 3) the product’s energy consumption or energy efficiency rating. These labels help consumers anticipate their energy costs and avoid costly surprises after a product has already been purchased.

The FTC’s May 2022 notice of proposed rulemaking sought comments on scheduled updates to the comparability ranges, which were last revised in 2017. The Commission did so under the Act, which requires updating of the labels every five years. The updates proposed would revise the comparability ranges and associated energy costs for refrigerators and freezers, dishwashers, water heaters, room air conditioners (range only), clothes washers, furnaces, televisions, and pool heaters. In addition, the Commission updates the average energy cost figures manufacturers must use to calculate a model’s estimated energy cost.

After reviewing the comments received, the FTC is now finalizing updates to the rule as proposed, with two changes. First, the Commission will wait to update the comparability rate for televisions until after the Department of Energy completes test procedure changes. Second, the Commission has set the effective date for room air conditioner labels to coincide with the 2023 production cycle, to help ensure an orderly transition for the manufacturers of these appliances.

The Commission vote approving publication of the notice in the Federal Register was 4-1, with Commission Christine S. Wilson voting no. Details on the specific EnergyGuide label changes can be found in the Federal Register notice announced today.

The Federal Trade Commission released the final agenda for its October 19 virtual kids digital advertising event that will explore how best to protect children from a growing array of marketing practices that make it difficult or impossible for children to distinguish ads from entertainment in digital media. The event, Protecting Kids from Stealth Advertising in Digital Media, will examine the current kids digital advertising landscape, its impact on children, and whether current legal and regulatory regimes are equipped to protect children from potential harms.

FTC Chair Lina M. Khan will provide opening remarks to kick off the event and will be followed by two presentations discussing the range of digital spaces children, including teens, frequent and the types of advertising and marketing techniques used to advertise to them. The event will also feature three panel discussions focused on:

• Children’s cognitive abilities: Panelists will examine children’s cognitive abilities at different ages and developmental stages to recognize and understand advertising content and to distinguish it from other content.
• Current advertising landscape: Panelists will explore the impacts of the current advertising landscape, including any harms stemming from children’s inability to distinguish advertising from other content.
• Possible solutions: Panelists will discuss the current legal regime, its challenges, and potential ways to protect children from any harmful effects related to digital marketing and advertising.

The event, which begins at 9 a.m. ET, 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 November 18, 2022 to submit comments on the topics that will be discussed at the event.

The Federal Trade Commission and the California Department of Financial Protection and Innovation (DFPI) are taking action against various companies doing business as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America, and the owners of the companies, Dominic Ahiga and Roger Scott Dyer, for operating a sham mortgage relief operation that misled consumers and cost them millions. In the first case brought jointly by the two agencies, the FTC and DFPI allege that the companies charged consumers thousands of dollars with false promises they would negotiate with consumers’ mortgage lenders to alter their loans, at times even representing they were affiliated with government COVID-19 relief programs. A federal court has temporarily shut down the operation and frozen the assets of the defendants in the case.  

“At a time when millions of Americans were dealing with a pandemic and struggling to pay their mortgages, defendants preyed on consumers with false promises of mortgage assistance relief” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are excited to build on our relationship with California’s DFPI in this case and will continue to work with our state partners to shut down schemes that take advantage of consumers experiencing financial hardship.”

“Illegal mortgage relief assistance schemes prey on the most vulnerable homeowners and are a significant threat to the generational wealth that home ownership provides for consumers,” said DFPI Commissioner Clothilde Hewlett. “The DFPI has taken strong, decisive action against the companies behind this scheme using the California Consumer Financial Protection Law to put a stop to their illegal activities and protect not only California consumers, but also consumers nationwide.”

The defendants have pitched their services under a number of names, including Academy Home Services, Atlantic Pacific Service Group, Golden Home Services America, and Home Matters USA among others. The FTC and DFPI complaint alleges that they have been deceiving consumers since at least June of 2018 with false promises that they can negotiate lower interest rates or payments.

The investigation in this case found that the defendants target distressed homeowners with their deceptive claims in telemarketing calls, text messages and online ads, often promising that in just three months, they can get consumers’ mortgages modified. In many cases, the complaint alleges, they claimed to be affiliated with government agencies or that their services were part of government COVID-19 assistance programs. When consumers paid for the defendants’ services, they rarely, if ever, get the promised modifications, and instead are harmed by the scheme in numerous ways:

• Deceiving consumers about their services: The defendants, as part of the sales process, regularly misled consumers, saying they had a track record of success and were able to “beat the system.” Consumers would receive documents with bogus claims about specific changes to their mortgage, including lowered interest rates or payments, but the complaint alleges that the defendants regularly failed to deliver any meaningful benefit to consumers.

• Costing consumers money and harming their credit: While the defendants charged consumers, many of whom were already struggling with mortgage payments, hundreds or even thousands of dollars, the harms extended beyond that loss. In many cases, the defendants told consumers not to pay their mortgage while using their “services,” leading to many consumers facing late fees and significantly lower credit scores.

• Costing consumers their homes: According to the complaint, the defendants require consumers to sign “cease and desist” letters that are sent to their mortgage lender, requiring the lenders to communicate only with the defendants. By not receiving notices of missing payments or default even as they continue to pay defendants, some consumers have found themselves in foreclosure.

The complaint alleges that the defendants’ practices violate numerous laws and regulations, including the FTC Act, the Mortgage Assistance Relief Services Rule, the Telemarketing Sales Rule, the COVID-19 Consumer Protection Act, and the California Consumer Financial Protection Law.

The individual defendants in this case are Dominic Ahiga and Roger Scott Dyer.  The corporate defendants in this case are Apex Consulting & Associates, Inc., Green Equitable Solutions, Infocom Entertainment Ltd, Inc., and South West Consulting Enterprises, Inc. 

The Commission vote authorizing the staff to file the complaint and request for a temporary restraining order was 5-0. The complaint was filed in the U.S. District Court for the Central District of California. The court entered the temporary restraining order against the defendants on September 14, 2022.

The Federal Trade Commission has announced enforcement priorities to fight for consumers who work in jobs that are part of the gig economy. In a new policy statement adopted today, the Commission outlined a number of issues facing gig workers, including deception about pay and hours, unfair contract terms, and anticompetitive wage fixing and coordination between gig economy companies.

“No matter how gig companies choose to classify them, gig workers are consumers entitled to protection under the laws we enforce,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are fully committed to coordinating our consumer protection and competition enforcement efforts within the FTC as well as working with other agencies across the government to ensure gig workers are treated fairly.”

• Misrepresentations about the nature of gig work: While gig companies promote independence to potential workers, in practice these firms may tightly prescribe and control their workers’ tasks in ways that run counter to the promise of independence and an alternative to traditional jobs.

• Diminished bargaining power: Workers have little leverage to demand transparency from gig companies, even in the face of unclear information about when work will be available, where they will have to perform it, or how they will be evaluated.

• Concentrated markets: Markets populated by gig companies are often concentrated, resulting in reduced choice for workers, customers, and businesses. These companies may be more likely to exert their market power in anticompetitive ways that harm workers’ wages, job quality, and other aspects of gig work.

The policy statement makes clear that the FTC’s authority to enforce both competition and consumer protection laws in the gig economy is not affected by how companies choose to classify the consumers who perform gig work. In the statement, the Commission names multiple areas where the Commission will aim to prevent harm to consumers:

• Holding companies accountable for claims and conduct about costs and benefits: Gig companies must not be deceptive in their claims to prospective gig workers about potential earnings, and they must be transparent and truthful about costs borne by workers.

• Combating unlawful practices and constraints imposed on workers: Gig companies using artificial intelligence or other advanced technologies to govern workers’ pay, performance, and work assignments are still required to keep promises they make to workers. Companies must also ensure that any restrictive contract terms, including those limiting workers from seeking other jobs, do not violate the FTC Act or other laws.
• Policing unfair methods of competition that harm gig workers: The FTC will investigate evidence of agreements between gig companies to illegally fix wages, benefits, or fees for gig workers that should be open to competition. The FTC will also investigate exclusionary or predatory conduct that could cause harm to customers or reduced compensation or poorer working conditions for gig workers.

The policy statement notes that companies that fail to follow the laws governing unfair, deceptive, or anticompetitive practices could be obligated to pay consumer redress and civil penalties and may be ordered to cease unlawful business practices. The Commission also notes in the statement that it will partner with other governmental agencies to protect gig workers.

The Commission voted 3-2 at an open meeting to adopt the policy statement, with Commissioners Noah Joshua Phillips and Christine S. Wilson voting in the negative.

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 National Labor Relations Board Field Office or submit a charge on the NLRB’s website.

The Federal Trade Commission has proposed a rule to fight government and business impersonation scams—a perennial scourge that has cost consumers hundreds of millions of dollars over the past five years. The proposed rule would codify the well-understood principle that impersonation scams violate the FTC Act, as do those who provide impersonators with the means to harm consumers. The proposed rule would allow the Commission to recover money from, or seek civil penalties against, scammers who harm consumers in violation of the rule.

“The proposed rule will expand the Commission’s toolkit to combat the significant harm caused by government and business impersonation frauds,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We look forward to comments from the public on our efforts to deter fraud, hold impersonators accountable, and secure redress for consumers.”

Fraud reports to the FTC about government and business impersonation scams rose sharply at the beginning of the COVID-19 pandemic. The FTC received more than 2.5 million reports of these scams from consumers nationwide from the beginning of 2017 through the middle of 2022, and those consumers reported losing more than $2 billion to these scams.

Government and business impersonators can take many forms, posing as, for example, a lottery official, a government official or employee, or a representative from a well-known business or charity. Impersonators may also use implicit representations, such as misleading domain names and URLs and “spoofed” contact information, to create an overall net impression of legitimacy. These scammers are fishing for information they can use to commit identity theft or seek monetary payment, often requesting funds via wire transfer, gift cards, or increasingly cryptocurrency.

The proposed rule announced today follows an Advance Notice of Proposed Rulemaking published by the Commission last December. In response to that notice, the FTC received more than 160 public comments, none of which opposed proceeding with the rulemaking process. Comments came from members of the public as well as a bipartisan coalition of 49 state attorneys general and multiple companies and industry organizations.

In the Notice of Proposed Rulemaking announced today, the Commission is seeking comment on proposed measures that would fight government and business impersonation scams by declaring various tactics used by scammers unlawful. These include posing as a government or business by name or by implication. For example, the proposed rule would ban scammers from:

• Using government seals or business logos when communicating with consumers by mail or online.

• Spoofing government and business emails and web addresses, including spoofing “.gov” email addresses or using lookalike email addresses or websites that rely on misspellings of a company’s name.

• Falsely implying government or business affiliation by using terms that are known to be affiliated with a government agency or business (e.g., stating “I’m calling from the Clerk’s Office” to falsely imply affiliation with a court of law).  

The proposed rule would also apply to those who provide “means or instrumentalities” for those committing a government or business impersonation scam, such as a supplier who manufactures a fake government credential used by scammers. In addition, the proposed rule would include non-profit organizations in its definition of businesses, so that it would apply to scammers that impersonate charities.

The proposed rule would allow the FTC to seek important relief for consumers across a broad array of government and business impersonation cases. This is especially important following the Supreme Court’s ruling in AMG Capital Management LLC v. FTC, which significantly limited the agency’s ability to return to consumers money that was taken in a scam.

The notice includes questions for public comment to inform the Commission’s decision-making on the proposal. These include questions about provisions in the proposed rule and whether other provisions should or should not be included in the rule. After the Commission reviews the comments received, it will decide whether to take the necessary next steps toward issuance of a final rule.

The Commission vote to approve the Federal Register notice announcing the notice was 5-0. The notice will be published in the Federal Register soon. Instructions for filing comments appear in the notice. Comments must be received within 60 days of the publication of the notice.

The Federal Trade Commission released a report today showing how companies are increasingly using sophisticated design practices known as “dark patterns” that can trick or manipulate consumers into buying products or services or giving up their privacy. The dark pattern tactics detailed in the report include disguising ads to look like independent content, making it difficult for consumers to cancel subscriptions or charges, burying key terms or junk fees, and tricking consumers into sharing their data. The report highlighted the FTC’s efforts to combat the use of dark patterns in the marketplace and reiterated the agency’s commitment to taking action against tactics designed to trick and trap consumers.

“Our report shows how more and more companies are using digital dark patterns to trick people into buying products and giving away their personal information,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This report—and our cases—send a clear message that these traps will not be tolerated.”

For years, unscrupulous direct-mail and brick-and-mortar retailers have used design tricks and psychological tactics such as pre-checked boxes, hard-to-find-and read disclosures, and confusing cancellation policies, to get consumers to give up their money or data. As more commerce has moved online, dark patterns have grown in scale and sophistication, allowing companies to develop complex analytical techniques, collect more personal data, and experiment with dark patterns to exploit the most effective ones. The staff report, which stems from a workshop the FTC held in April 2021, examined how dark patterns can obscure, subvert, or impair consumer choice and decision-making and may violate the law.

The report, Bringing Dark Patterns to Light, found dark patterns used in a variety of industries and contexts, including e-commerce, cookie consent banners, children’s apps, and subscription sales. The report focuses on four common dark pattern tactics:

• Misleading Consumers and Disguising Ads: These tactics include advertisements designed to look like independent, editorial content; comparison shopping sites that claim to be neutral but really rank companies based on compensation; and countdown timers designed to make consumers believe they only have a limited time to purchase a product or service when the offer is not actually time-limited. For example, the FTC took action against the operators of a work-from-home scheme for allegedly sending unsolicited emails to consumers that included “from” lines that falsely claimed they were coming from news organizations like CNN or Fox News. The body of these emails included links that sent consumers to additional fake online news stories, and then eventually routed consumers to sales websites that pitched the company’s work-from-home schemes.

• Making it difficult to cancel subscriptions or charges: Another common dark pattern involves tricking someone into paying for goods or services without consent. For example, deceptive subscription sellers may saddle consumers with recurring payments for products and services they never intended to purchase or that they do not wish to continue purchasing. For example, in its case against ABCmouse, the FTC alleged the online learning site made it extremely difficult to cancel free trials and subscription plans despite promising “Easy Cancellation.” Consumers who wanted to cancel their subscriptions were often forced to navigate a difficult-to-find, lengthy, and confusing cancellation path on the company’s website and click through several pages of promotions and links that, when clicked, directed consumers away from the cancellation path. 
• Burying key terms and junk fees: Some dark patterns operate by hiding or obscuring material information from consumers, such as burying key limitations of the product or service in dense terms of service documents that consumers don’t see before purchase. This tactic also includes burying junk fees. Companies advertise only part of a product’s total price to lure consumers in, and do not mention other mandatory charges until late in the buying process. In its case against LendingClub, the FTC alleged that the online lender used prominent visuals to falsely promise loan applicants that they would receive a specific loan amount and pay “no hidden fees” but hid mention of fees behind tooltip buttons and in between more prominent text.

• Tricking consumers into sharing data: These dark patterns are often presented as giving consumers choices about privacy settings or sharing data but are designed to intentionally steer consumers toward the option that gives away the most personal information. The FTC alleged that smart-TV maker Vizio enabled default settings allowing the company to collect and share consumers’ viewing activity with third parties, only providing a brief notice to some consumers that could easily be missed.

As detailed in the report, the FTC has worked to keep pace with the evolving types of dark patterns used in the marketplace. The Commission has sued companies for requiring users to navigate a maze of screens in order to cancel recurring subscriptions, sneaking unwanted products into consumers’ online shopping carts without their knowledge, and experimenting with deceptive marketing designs. 

The Commission voted 5-0 at an open meeting to authorize the release of the staff report.

The Federal Trade Commission is sending payments totaling more than $415,000 to 3,508 consumers who financed a car or truck at a Tate’s Auto dealership after January 1, 2013, and later had the vehicle repossessed. Tate’s Auto, which operated dealerships in Arizona and New Mexico, allegedly deceived consumers about payment information and falsified information on consumers’ financing applications.

Eligible consumers will receive a check in the mail, unless they specifically requested a PayPal payment. Recipients should cash checks within 90 days or redeem PayPal payments within 30 days. Consumers who have questions about their refund should call the refund administrator, JND Legal Administration, at 888-964-0009. The Commission never requires people to pay money or provide account information to get a refund.

The FTC sued Tate’s Auto in 2018 for inflating consumers’ income on financing applications to third-party lenders, as well as deceiving consumers about the lease or financing terms of the vehicles they were buying. Many of Tate’s customers were citizens of the Navajo Nation, and Tate’s Auto frequently ran radio and print ads in Navajo media. The FTC settled with the auto dealerships in August 2020 and ultimately reached a settlement with the individual defendant in July 2021 that required the defendant to pay money for consumer redress. The FTC wishes to acknowledge the valuable assistance of the Navajo Nation Human Rights Commission during the investigation of this case.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of 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. Because of that ruling, the Commission no longer has its strongest tool to return money to consumers, and it will become harder to provide refunds to consumers harmed by deceptive and unfair conduct going forward. The Commission has urged Congress to restore the Commission’s ability to get money back for consumers.