Court Agrees With FTC: Can Seek Relief Under Section 19

The U.S. District Court for the Northern District of Illinois recently used Section 19 of the FTC Act to impose a $5 million restitution award after the original restitution award under Section 13(b) was vacated by the Seventh Circuit based on its ruling that monetary relief was not available under Section 13(b).

Originally, the district court ordered the restitution based on the FTC's allegations – under the FTC's UDAP prohibition and ROSCA – that the credit monitoring company and its owner deceived consumers with fake rental property advertisements and deceptive promises of "free" credit reports, and then enrolled them into a costly monthly credit monitoring service.  However, the Seventh Circuit held that Section 13(b) does not grant the FTC authority to order restitution.  Subsequently, in AMG Capital Management v. FTC, the Supreme Court ruled that Section 13(b) does not authorize the FTC to seek monetary relief such as restitution or disgorgement (we