Consumer Protection and Recovery Act

Floor Speech

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Mr. PALLONE. Mr. Speaker, pursuant to House Resolution 535, I call up the bill (H.R. 2668) to amend the Federal Trade Commission Act to affirmatively confirm the authority of the Federal Trade Commission to seek permanent injunctions and other equitable relief for violations of any provision of law enforced by the Commission, and ask for its immediate consideration in the House.

The Clerk read the title of the bill.

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Mr. PALLONE. 2668.

Mr. Speaker, I rise in strong support of H.R. 2668, the Consumer Protection and Recovery Act.

This legislation is essential to protect consumers and honest businesses across the country. It restores a critical tool of the Federal Trade Commission to go to court to get victimized consumers their money back and make lawbreakers return their illegal profits. The tool is section 13(b) of the Federal Trade Commission Act.

For over 40 years, section 13(b) has been the FTC's primary and most effective means to obtain relief for consumers and businesses. Over just the last 5 years alone, the FTC returned over $11.2 billion to nearly 10 million Americans who had been scammed.

As one example, the FTC used this authority to help relieve veterans and servicemembers from crushing student debt after they were scammed by the University of Phoenix and DeVry. The agency has also returned money to seniors and other vulnerable groups often targeted by fraud. None of this would have been possible without 13(b).

Congress must act now because, in April, the Supreme Court ruled that 13(b) did not allow the FTC to seek restitution for consumers. Instead, the Court ruled that the FTC could only seek injunctions to stop bad actors from violating the law. In the case before the Court, a criminal payday lender was found to have defrauded consumers of $1.3 billion, but that money could not legally be returned to the victims.

Without this legislation, that unjust result remains the law of the land. That is why this legislation has such broad support, including military and veterans groups, business organizations, consumer advocates, unions, and the attorneys general of 28 States, including both Republican- and Democratic-led States. That is why the FTC, during both the Trump and Biden administrations, has repeatedly and unanimously begged Congress to act to save the consumer protections afforded by 13(b).

The opponents of the bill have misrepresented and mischaracterized what this bill does, in my opinion, Mr. Speaker. The Consumer Protection and Recovery Act simply restores the FTC's ability to seek equitable monetary relief for violations of all the laws it enforces, exactly as it has done for over 40 years.

Some say these authorities are ripe for abuse. But under this bill, the FTC would not be able to bring more cases or enact more rules. The bill does not allow for civil penalties, fines, or punitive damages. Consumers can only get back what they lost, and lawbreakers only have to give up their illegal profits.

Nothing in current law can replace the authorities that the FTC has lost. The suggested alternative, section 19 of the FTC Act, does not protect consumers in all cases and requires procedural hurdles that take far too long for any meaningful relief, or any relief at all, to reach our constituents.

This bill ensures consumers are not left holding the bag when bad guys break the law. The money they get back allows hardworking families to pay rent, feed their children, buy clothes, and make ends meet.

I thank Representative Cardenas for his leadership on this bill as well as Consumer Protection and Commerce Subcommittee Chair Jan Schakowsky for all her hard work in helping us get this bill to the floor today.

Mr. Speaker, I urge all of my colleagues to put their constituents first and support the Consumer Protection and Recovery Act, and I reserve the balance of my time.

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Mr. PALLONE. Schakowsky), the chairman of our Consumer Protection and Commerce Subcommittee. She has worked long and hard on this legislation.
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Mr. PALLONE. Castor).
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Mr. PALLONE.

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Mr. PALLONE. Will the gentleman yield?

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Mr. PALLONE. Mr. Speaker, I thank the gentleman from Oregon for the question.

The intent of this bill is to restore the FTC's authority to secure restitution not to pile penalties onto small businesses that make an honest mistake.

We want to allow the FTC to ensure consumers who are harmed by a violation of the law are made whole. So let me be clear. This bill does not allow the FTC to impose civil penalties or punitive damages. It only allows for equitable remedies, putting everything back the way it was before the violation occurred.

When the FTC is going after truly bad actors who intentionally preyed on consumers, it would need to use the authority under a different part of its statute to seek penalties and also meet the burden of proof required under that additional authority.

And another important point is that this bill actually protects honest small businesses from having to compete against unscrupulous companies that break the law to give themselves an unfair advantage. So this bill gives the FTC back the tools it needs to ensure a level playing field in the marketplace.

I thank the gentleman from Oregon for engaging on this bill and working with us on our shared goal of protecting American consumers.

Miss RICE of New York. Mr. Speaker, I rise in strong support of H.R. 2668, the Consumer Protection and Recovery Act.

This legislation would restore a key authority of the Federal Trade Commission, which allows it to return money to consumers who have been defrauded by scammers. The FTC has used this authority to protect consumers for the past 40-plus years. It is often senior citizens, veterans, and other vulnerable members of society who tend to be victims of scams, that benefit most from the FTC's ability to return money.

But as a result of the Supreme Court's decision, defrauded consumers are no longer being protected. Instead, they are being left out in the cold at one of the worst possible times.

Around 327,000 people have filed a fraud complaint linked to the COVID-19 pandemic, according to FTC data. And those victims have lost a combined $488 million. Scammers are taking advantage of the public health crisis and the Court's decision is hampering the FTC's efforts to combat this fraud.

That is why it is critical that we pass H.R. 2668 to restore the FTC's authority to seek equitable relief by amending section 13(b) of the Federal Trade Commission Act to provide the FTC with express authority to obtain both injunctive and monetary equitable relief.

I thank my colleague on the Committee on Energy and Commerce, Representative Cardenas, for introducing this bill, and I urge my colleagues to support it.

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Mr. PALLONE. Porter), who is a strong advocate for consumers.

Mr. Speaker, to go back to this bill, I know my colleague from Illinois--who I like a lot--was talking about H.R. 1, but let's go back to this bill.

I know that there have been a lot of statements on the other side of the aisle about, why this bill? They didn't like the process; they didn't like what we were doing. But, look, the bottom line is very simple here. For many years, the FTC was going after bad actors and those who were committing fraud and scamming consumers, and they were basically getting the money back that was stolen from the consumers and giving it back to those consumers in a form of restitution.

The Supreme Court ruled they couldn't continue to do that, not because the Court thought it was a bad idea, but they just didn't think the statutory language allowed it. And since that time, the FTC--both under Democrat and Republican administrations--is asking us to restore that ability of the FTC to seek restitution and give money back to the consumers who were defrauded.

There is nothing else here. That is exactly what we are doing. Nothing more.

I don't really understand the opposition that is coming from the Republican side of the aisle because we are just making it possible for the FTC to do its job effectively, which they were doing for so many years when they recovered billions and billions of dollars for consumers.

I would say look at the language, look at what we are actually doing here, and please support this bill because this is good for everybody in this country, regardless of whether they are Democrat or Republican, or their ideology. This is not ideological. This is a practical way to help the average person.

Mr. Speaker, I urge support, and I yield back the balance of my time.

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