Northwest Region

In 1975, the Northwest Region (NWR) pioneered the first use of the FTC’s 13(b) authority to obtain preliminary relief in a fraud case. In Travel King and Psychic Surgery, the Region took action against travel agencies for making false claims about psychic surgery, misrepresenting it as an actual surgical operation to remove diseased tissue from the body using only the bare hands.

In 1996, NWR brought Fortuna Alliance, the FTC’s first major case where the internet was used to perpetrate fraud. The defendants allegedly promised consumers that, for a payment of $250, they would receive profits of over $5,000 per month. The program spawned many websites and victimized thousands of investors across 60 different countries. Although the defendants initially operated out of the U.S., the FTC discovered they had secreted millions of dollars to offshore bank accounts in Antigua. With the aid of the courts and banks in Antigua, the Commission got an order against the defendants, requiring them to repatriate over $2 million in offshore assets and pay approximately $7 million in redress to consumers from 60 countries. To keep consumers around the world updated about the case, the FTC created a website to provide status updates, redress information, and pleadings.

The Northwest Region (NWR) was among the first law enforcers to apply FTC law to competition issues related to internet commerce. In 1998, NWR was responsible for Fair Allocation System, one of the first FTC competition cases involving internet sales. The FTC alleged an association of 25 automobile dealerships in five Northwest states planned to boycott Chrysler Corporation if the manufacturer did not agree to restrict the number of vehicles available to competing dealers engaged in low-price internet marketing. The auto dealers formed the association, Fair Allocation System, Inc., to address their concerns. As described in the Analysis to Aid Public Comment accompanying the settlement, “The goal of the boycott was to limit the sales of a car dealer that sells cars at low prices and via a new and innovative channel – the Internet.”