FTC Testimony Outlines Agency's Work to Protect Consumers, Promote Competition

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In testimony before the U.S. House Appropriations Subcommittee on Financial Services and General Government, the Federal Trade Commission summarized the agency's FY 2013 budget request and described its ongoing work to promote competition and protect American consumers.

The testimony, delivered by FTC Chairman Jon Leibowitz and Commissioner J. Thomas Rosch, outlined steps the agency has taken to carry out its mission efficiently, without putting unnecessary burdens on businesses. It describes FTC initiatives such as the agency's efforts to stop scammers from taking advantage of financially distressed consumers, protect privacy, and ensure that American consumers benefit from competition in the health care, technology and energy sectors.

The testimony states that the FTC has continued to bring law enforcement actions to stop con artists aiming to take advantage of financially strapped consumers using deceptive practices such as falsely promising that they can help modify consumers' mortgages or solve their debt problems; and by using threats and deception to collect consumer debts. Overall, the testimony states, the FTC has brought more than 90 cases since 2009 to put a stop to these types of scams. Since 2010, the agency has filed seven actions to combat illegal debt collection practices, and obtained more than $8.1 million in civil penalties.

The testimony also notes that consumer privacy remains a top priority for the FTC. Last year the agency reached settlements with some of the biggest online companies, Facebook and Google, to make sure they live up to the privacy promises that they make to consumers. The FTC recently proposed updating and modifying its Children's Online Privacy Protection Rule to make sure that it continues to protect the privacy of children, even as online technology evolves.

The testimony also highlighted FTC enforcement actions in the health care industry, noting that health care expenditures make up nearly 18 percent of the nation's GDP. The agency participated in a law enforcement crackdown against scammers who deceptively marketed "medical discount plans" as insurance. It also took legal action that led to a settlement with Reebok, which required the company to pay $25 million to resolve charges that the company made deceptive claims about its toning shoes. As part of its efforts to promote competition in health care, the agency has taken recent merger enforcement actions involving hospitals, dialysis centers, pharmaceuticals manufacturers, and pharmacies, the testimony states.

In addition, the testimony describes the FTC's efforts to address evolving technologies, which lead to tremendous benefits for consumers but also pose challenges. The agency has sought to take a balanced approach in investigating potentially anticompetitive conduct by dominant high-tech firms, while continuing to root out deception and fraud on the Internet. In the last year the agency brought its first case involving a mobile app. Also the FTC issued a report this year that called on companies involved in kids apps to provide greater transparency about their data collection practices.

The FTC also has continued to place a major focus on energy prices, in light of the heavy impact they have on the budgets of American consumers, the testimony states. The Commission continues to closely examine proposed mergers in the energy sector, as well as input from the public about potential violations of its Market Manipulation Rule.

In closing, the testimony requested $300 million to support 1,186 "full-time equivalent" employees (FTEs) to meet the challenges of FY 2013.

Commissioner Rosch dissented from the appropriations requested for the FTC, saying, among other things, that in austere times the agency should do more to perform its mission with fewer resources.

The Commission vote authorizing the testimony was 4-0

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter..

(HouseBudgetTestimonyFY2013)

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