U.S. Senate panel advances bill to help FTC fight deception, fraud

WASHINGTON (Reuters) – U.S. lawmakers on Wednesday sent to the Senate floor a Democratic-backed bill that would allow the Federal Trade Commission to force deceptive companies to return money to victims.

The Senate Commerce Committee split 14-14 along party lines to advance the bill, which would restore a power stripped from the FTC in a U.S. Supreme Court ruling last year. The measure moves to a full Senate vote despite the tie vote.

It was formally introduced in the Senate, where Democrats have narrow control, last week with only Democratic sponsors. The Democratic-controlled House of Representatives passed similar legislation last year.

If it becomes law, the bill would explicitly give the FTC the right to ask a judge to order money be returned, even if illegal conduct has halted.

Senator Mike Lee, a Republican, opposed the bill and criticized FTC Chair Lina Khan, a Democrat, for what he called “power grabs.”

The FTC had been suing deceptive companies and scam artists for decades to recover funds but was stopped in April 2021 by the Supreme Court, which ruled that the agency went further than it could legally in seeking court orders to make fraudsters return money.

In the five years before the decision, the FTC returned $11.2 billion to consumers, according to Senator Maria Cantwell’s office. Cantwell, a Democrat, is chair of the Senate Commerce Committee and a lead sponsor of the bill.

The Chamber of Commerce, a U.S. business group, opposes the measure. It argues the 10-year statute of limitations in the bill is too long, the bill should be limited to hard-core fraud rather than deception or competition matters and should only seek relief for actual harm done.

Because of the Supreme Court ruling, the FTC needs Congress to expressly give it authority to recover such funds.

Senator Amy Klobuchar, chair of the Senate Judiciary antitrust subcommittee, along with Senators Ben Ray Lujan and Raphael Warnock, also sponsored the bill.

(Reporting by Diane Bartz; Editing by Paul Simao)

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