The FTC joined with the National Labor Relations Board in order to bolster efforts to protect workers against anticompetitive and unfair practices. It also announced a $25 million refund to U.S. and international consumers that were allegedly defrauded by a sweepstakes scheme. And for the first time in FTC history, the Commission brought an action under the Military Lending Act against a Jewelry company that allegedly mislead military families. These stories and more after the jump.
Tuesday, July 19, 2022
Bureau of Competition and Bureau of Consumer Protection: Office of Policy Planning
- The FTC and National Labor Relations Board (NLRB) have joined in a Memorandum of Understanding that they expect to bolster the FTC’s efforts to protect workers by promoting competitive U.S. labor markets and ending unfair practices that harm workers. The agreement allows the FTC and NLRB to collaborate by sharing information, conducting cross-training for staff at each agency, and partnering on investigative efforts within each agency’s authority. The agreement expresses mutual interest for the two agencies, including (1) the extent and impact of labor market concentration; (2) the imposition of one-sided and restrictive contract provisions, such as noncompete and nondisclosure provisions; (3) labor market developments relating to the “gig economy” and other alternative work arrangements; (4) claims and disclosures about earnings and costs associated with gig and other work; (5) the impact of algorithmic decision-making on workers; (6) the ability of workers to act collectively; and (7) the classification and treatment of workers. The FTC has already cracked down on contract terms that it deemed anticompetitive and it has taken actions to address allegedly deceptive and unfair acts and practices aimed at workers, particularly those in the “gig economy”. We can expect to see additional actions in these and the other areas of mutual interest.
Bureau of Competition and Bureau of Consumer Protection: Online Advertising and Marketing, Lottery & Sweepstakes
- The FTC announced that it is issuing $25 million to 244,745 U.S. and international consumers, with more than 2/3 going to American and Canadian consumers, who were allegedly defrauded by Next-Gen’s sweepstakes scheme. The FTC and the State of Missouri filed an action against Next-Gen, Inc., and other defendants, for allegedly sending mailers that falsely informed consumers that they had won or were likely to win a substantial cash prize, as much as $2 million, in exchange for a fee ranging from $9.00 to $139.99. Many consumers, including seniors, paid the defendants several times before realizing they had been scammed, according to the complaint.
Wednesday, July 20, 2022
Bureau of Consumer Protection: Deceptive/Misleading Conduct, Credit and Loan Offers
- The FTC, along with 18 states, announced a lawsuit against Harris Jewelry, a national jewelry retailer, to stop the company from allegedly misleading military families with illicit financing and sales practices. The complaint alleges that Harris Jewelry’s actions violates (1) Sections 5(a) and 18 of the FTC Act; (2) the Truth In Lending Act and Regulation Z; (3) the Electronic Fund Transfer Act and Regulation E; (4) the Military Lending Act; and (5) various states’ UDAP laws. This is the FTC’s first action under the Military Lending Act. More specifically, the FTC alleges that Harris Jewelry (1) made false or unsubstantiated claims that financing jewelry purchases through the company would result in higher credit scores; (2) misrepresented that the protection plan was required to finance purchases; and (3) failed to provide written disclosures and meet authorization requirements for contracts as required by law. The proposed order includes injunctive and monetary relief. This action comes in the wake of the FTC’s Associate Director of the Division of Financial Practices, Malini Mithal’s, statement before the House Committee on Oversight and Reform Subcommittee on National Security. Associate Director Mithal pledged that the FTC “will continue to take action to protect servicemembers and the broader military community from fraud and related threats” and “will use every tool at [its] disposal to do so.”
For further information, please contact:
Tiffany Aguiar, Crowell & Moring
taguiar@crowell.com
