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FTC Remedies for Consumer Protection Violations

5. What administrative penalties and remedies may the FTC seek for violation of FTC regulations?

The FTC, through the negotiation of consent orders, has broad powers to fashion appropriate remedies to protect consumers in trade regulation cases, including:

•    rescission of contracts (each party must return what has been obtained from the other);

•    refund of money or return of property;

•    payment of damages to consumers, and

•    public notification of trade practice violations.

In an administrative action by the FTC, the administrative court may issue civil fines. The fines must be enforced by filing a subsequent action in the Federal District Court. The basic penalty for trade practice violation under the FTC Act is a civil fine of not more than $16,000 per violation. Fines may be assessed in three distinct situations:

•    for violation of a consent or cease and desist order,

•    for a violation of trade regulation rule, and

•    for a knowing violation of prior FTC orders against others.

Each separate violation of an order or rule shall be a separate offense.

•    Discussion: How do you feel about the authority of the administrative court to administer remedies for violations of consumer protection laws? Does it affect your opinion that the fines or other remedies must be enforced through a civil court action? Why or why not?

•    Practice Question: What is the role of the Federal Trade Commission and what is the extent of its authority and jurisdiction?

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