The Supreme Court made a major decision in a recent case involving the Federal Trade Commission  – the FTC’s ability to order companies to pay up when they are caught scamming consumers is now greatly limited.

Before the ruling, if the FTC found a company conducting business deceptively, they could penalize companies with monetary restitution as per Section 13(b) of the FTC Act.

Section 13(b) of the FTC Act grants the commission the ability to seek restitution from these companies through “injunctions.” The vague wording by Congress allowed the FTC to interpret it as being given the ability to order companies to get consumers’ money back. Consumers could report fraud on the FTC website, and apply for a refund in any case involving their dollars. 

FTC Chairwoman, Rebecca Kelly, says that the law helped deliver billions of dollars back to consumers over the years. That is, up until now.

In the AMG Capital Management v. FTC case, the Supreme Court is finally clearing the air with a unanimous decision – Section 13(b) does not actually authorize the agency to obtain monetary recompense from businesses, even though they may violate the law. The FTC may take action against such companies that may sometimes result in payment, but it will no longer be a primary consequence.

What does that mean for you?

Consumers need to be more wary than ever when it comes to shopping online. While you can still report fraud and apply for refunds on the FTC website, they won’t be receiving nearly as much monetary relief as they used to.

Our tips:

• Read our guide to recognizing online shopping scams
• Learn how to avoid COVID-19 scams
• How to get your money back

We will be updating our guides to address even more of the recent scams. To take steps to protect yourself online, make sure to turn on your newsletter notifications so you can stay up to date on how to avoid the latest scams.