A unanimous U.S. Supreme Court ruling will weaken the power of the Federal Trade Commission to force companies that dupe consumers into delivering cash relief to the injured parties.
A provision of the Federal Trade Commission Act frequently has been used as a way for the FTC to obtain monetary relief in the wake of violations of the law.
But in a 9-0 ruling on Thursday, the Supreme Court found that the part of the law in question, Section 13(b), does not authorize the FTC to take such actions. Instead, the FTC is limited to simply seeking “a permanent injunction” of the illegal activities themselves.
Since Congress later enacted a law authorizing the FTC to seek monetary relief, “the court said it did not believe Congress would have done so if 13(b) already granted that authority,” according to CNBC.
Writing for the court, Justice Stephen Breyer said:
“It is highly unlikely that Congress, without mentioning the matter, would grant the Commission authority to circumvent its traditional §5 administrative proceedings.”
Breyer wrote that the FTC can seek restitution under other provisions of the law, Politico reports: “If the Commission believes that authority too cumbersome or otherwise inadequate, it is, of course, free to ask Congress to grant it further remedial authority,” he wrote.
Rebecca Kelly Slaughter, acting FTC chairwoman, criticized the decision in the case, known as AMG Capital Management LLC v. FTC:
“In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior. With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”
Worried that this court ruling will leave you less protected from fraudsters? Fight back by learning “10 Golden Rules to Avoid Getting Scammed.”
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