FTC and DoJ Outline Approach to Safeguarding Consumers During Coronavirus Pandemic

 

Federal Trade Commission Chairman Joe Simons has issued a statement on the FTC’s efforts to protect consumers during the coronavirus pandemic FTC attorney Simons stated that “[w]e will not tolerate businesses seeking to take advantage of consumers’ concerns and fears regarding coronavirus disease, exigent circumstances, or financial distress.”

The FTC is working in close collaboration with other enforcement authorities to stop scammers and other unfair and deceptive business practices during the pandemic.

For example, the Department of Justice is remaining vigilant in detecting, investigating, and prosecuting wrongdoing related to the crisis. In a recent memo to U.S. Attorneys, Attorney General Barr state, “The pandemic is dangerous enough without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated.”

The DoJ is focusing upon criminals that are attempting to exploit COVID-19 worldwide through a variety of scams. There have been reports of:
Individuals and businesses selling fake cures for COVID-19 online and engaging in other forms of fraud.
Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention.
Malicious websites and apps that appear to share virus-related information to gain and lock access to your devices until payment is received.
Seeking donations fraudulently for illegitimate or non-existent charitable organizations.

There can be little doubt that marketing missteps related to the pandemic may have severe, heightened consequences for those involved. Work-from-home business opportunities will almost certainly be closely scrutinized, including, but not limited to, earnings claims substantiation, disclosure documents and earnings claims statements and testimonials,

Interestingly, FTC attorney Simons has indicated that the FTC will remain flexible and reasonable in enforcing compliance requirements on companies that may hinder the provision of important goods and services to consumers, and will consider good faith efforts to provide needed goods and services in making enforcement decisions.

“The FTC is ready to assist businesses that may seek guidance about compliance obligations on consumer protection issues during this unprecedented time,” FTC lawyer Simons stated.

In fact, the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission have jointly announced an expedited process for the review of proposed collaborative efforts to deal with the COVID-19 pandemic. The March 24 joint statement recognizes that addressing the spread of the virus will require “unprecedented cooperation . . . among businesses to protect America’s health and safety.”

Both agencies are “committed to providing individuals and businesses in any sector of the economy that are responding to this national emergency expeditious guidance about how to ensure their efforts comply with the federal antitrust laws.”

Richard B. Newman is an FTC lawyer at Hinch Newman LLP. You can find him on Twitter @FTC lawyer.

Informational purposes only. Not legal advice. May be considered advertising material.

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