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FTC Enforcement Process

In a previous article, we discussed warning letters, and in this article, we will be looking into what exactly goes into the enforcement process of the FTC. The Federal Trade Commission (FTC) is the regulatory agency responsible for policing U.S. advertising and marketing. They are responsible for regulating advertising, labeling, and packaging practices in a wide range of industries — including food, drugs, alcohol, and cosmetics — to ensure your health, safety, and economic well-being.

The FTC has a strict enforcement process that begins with a complaint being filed and ends with court action if necessary. The FTC receives thousands of complaints annually, and the agency received 2.68 million complaints in 2017 according to the FTC's annual summary of complaints. If you are accused of false advertising, you must comply with the FTC’s cease-and-desist order. Once the FTC has determined that you have violated its cease and desist orders, you may be subjected to fines, penalties, injunctions and/or an order forcing you to make full restitution to all affected consumers. Although the FTC doesn’t typically disclose why an investigation began on a company, a complaint may be enough probable cause to launch an investigation. Particularly if the complaint includes one of the following circumstances:

  • The complaint is connected to one of the FTC's areas of emphasis

  • The complaint pertains to alleged unfair or deceptive acts and practices

  • The complaint is otherwise newsworthy; or

  • A consumer advocacy group or standards-setting group gets involved.

For example, in May of 2022, the FTC acted to shut down 'The Credit Game' for running an untruthful credit repair scheme. In a complaint filed against The Credit Game, the FTC claimed that the company has illegally charged consumers egregious amounts of money in order to have access to credit repair. They also advised consumers to “invest” their COVID-19 governmental benefits in their unlawful services. The company’s “services” offered to consumers included filing false identity theft reports with the FTC and encouraging consumers to take actions that were unlawful. On May 3, 2022, a temporary restraining order was issued that would halt the company's illegal activity, appoint a receiver, and freeze the defendants’ assets.

According to the FTC’s complaint, the defendants claim to have brought in more than $15 million in business through their operations. "The Commission vote authorizing the staff to file the complaint and request for the temporary restraining order was 4-0" and the company ceased all operations. To read the full report provided by the FTC, click here.


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