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Pallone Floor Statement on Legislation Restoring FTC’s 13(b) Consumer Protection Powers

Jul 20, 2021
Press Release

Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) delivered the following remarks on the House Floor today during consideration of H.R. 2668, the Consumer Protection and Recovery Act:

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 (FTC) 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 five 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 service members 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. And 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).  

Opponents of the bill have misrepresented and mischaracterized what this bill does. 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 law breakers 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 hard-working families to pay rent, feed their children, buy clothes, and make ends meet. 

I want to thank Representative Cardenas for his leadership on this bill as well as Consumer Protection and Commerce Subcommittee Chair 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. I reserve the balance of my time.

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