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FTC Returns $392 Million to Consumers After Law Enforcement Actions

In the United States, the Federal Trade Commission (FTC) last year returned $392 million to citizens after a refund made possible as a result of the actions of law enforcement officers.

FTC Returns $392 Million to Consumers After Law Enforcement Actions

Last Tuesday, June 6, the commission published a press release containing information that about $248 million of this amount of money was received in cases for which the FTC sent the first distribution payments in 2022. The remaining funds are additional distributions for earlier cases.

The largest first mailing list for the year, totaling $ 149 million, was sent to consumers, according to preliminary information, affected by the operation of the illegal financial pyramid AdvoCare. As part of this proceeding, the FTC sued the company of the same name, which officially positions itself as a firm specializing in multi-level marketing.

The regulator claims that AdvoCare used an illegal pyramid scheme to deceive people who were assured that they would be able to receive significant income as distributors of health products. Most of the consumers who became interested in this offer and decided to start interacting with the company, not only did not receive any profit but also lost their money. In the course of interaction with the victims, AdvoCare insisted on the priority of attracting new distributors, and not on selling goods. The relevant information was contained in the press release of the FTC, which was published in early May last year.

The regulator’s annual report on consumer refunds for 2022 indicates that the second and third largest amounts of first payments last year were about $24 million and $23 million, respectively.

The FTC reports that about $24 million has been returned to people who lost their financial means during the next-generation lottery. The defendants sent millions of mailings to the victims containing false information about winning or a high probability of a cash prize. Large sums were promised in exchange for a monetary reward, the amount of which was significantly less than the winnings that did not exist in reality.

The third largest amount of $23 million was paid as part of a refund to consumers who paid for My Online Business Education (MOBE), a business coaching scheme. In this case, the defendants deceived the victims that the program would allow them to receive significant income in the shortest possible time, used methods of psychological pressure, demanding to buy membership packages and sell them to other people. The relevant information was contained in the press release of the FTC, which was published in April last year.

The regulator noted last Tuesday that more than 90% of the funds returned to consumers last year came from cases that were resolved before the Supreme Court’s decision of 2021. This decision deprived the FTC of the authority to recover compensation from consumers.

The press release dated June 6 contained the suggestion that in the coming years, with a high probability, the amount of compensation to consumers will decrease, since the regulator is curtailing the practice of payments based on the results of enforcement actions before a decision is made in the case of AMG Capital Management, LLC v. FTC.

In April of this year, the commission sent warnings to 670 companies that civil sanctions would be applied against them in case of unjustified claims.

As we have reported earlier, Meta Seeks to Force FTC Into Court to Change Privacy Settlement.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.