APPENDIX

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This appendix includes summaries of the Commission's law enforcement, rulemaking, education, and advocacy activities for fiscal year 1997.

Law Enforcement

Commission law enforcement actions may be triggered by letters from consumers or businesses, Congressional inquiries, referrals from federal/state/local officials, or public information on consumer, business, or economic subjects.

If the Commission believes a violation of the law occurred, it may obtain voluntary compliance by entering into a Part 2 administrative consent order with a company or individual respondent. A company or individual signing a consent order need not admit a violation of the law, but must agree to stop the injurious practices.

If voluntary compliance is not reached, the Commission may issue an Part 3 administrative complaint. This results in a formal proceeding, much like a court trial, held before an Administrative Law Judge (ALJ), at which evidence is submitted, testimony is heard, and witnesses are examined and cross-examined. If a respondent decides to settle the charges against it, it may enter into a Part 3 consent order and end the proceeding. If the proceeding continues to completion, the ALJ issues an initial decision and the case moves to the Commission for final disposition. If the Commission ultimately finds a law violation, it may issue a cease-and-desist order or other appropriate relief. These final orders issued by the Commission may be appealed by respondents to a U.S. Court of Appeals (and, ultimately, to the U.S. Supreme Court).

In cases involving ongoing consumer fraud, the Commission may file a complaint in federal district court. The court can then order the defendants to immediately stop the practices cited in the complaint, and freeze their assets before further consumer injury occurs. In these cases, the Commission seeks consumer redress, or refunds for consumers who have been injured, and/or a permanent injunction barring the practices in the future.

In addition, when a company or individual violates a Commission Trade Regulation Rule, a statute enforced by the Commission, or a prior Commission order, a complaint may be filed in federal district court seeking civil penalties and an injunction against future violations.

Rulemaking

The Commission also issues Trade Regulation Rules and industry guides. The Commission may begin a rulemaking proceeding if it finds evidence of unfair or deceptive practices in an entire industry. Throughout the proceeding, the public has opportunities to attend hearings and file written comments, which the Commission considers along with the entire rulemaking record - the hearing testimony, staff reports, and the presiding officer's report - before making a decision on the proposed rule. A Commission rule may be challenged in any of the U.S. Courts of Appeals. When issued, the rules have the force of law. The Commission continually reviews its rules and guides, and amends or repeals them as needed.

Education

The Commission is committed to educating consumers and businesses about their rights and responsibilities under Federal Trade Commission regulations and to encourage informed consumer choice and competitive business practices in the marketplace. For each major consumer protection law enforcement or rulemaking initiative, an education campaign is launched. A campaign may consist of printed materials - which are also made available on the Commission Web site - specialized Internet pages, and/or public service announcements. The Commission views the consumer and business education effort as a cost-effective way to help minimize consumer injury and obtain compliance with the law.

Advocacy