|Formed||September 26, 1914|
|Headquarters|| Federal Trade Commission Building |
|Employees||1,131 (December 2011)|
|Annual budget||$311 million (FY 2019)|
The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) U.S. antitrust law and the promotion of consumer protection. The FTC shares jurisdiction over federal civil antitrust enforcement in the United States with the Antitrust Division of the U.S. Department of Justice. It is headquartered in the Federal Trade Commission Building in Washington, DC.
The Commission is headed by five Commissioners who each serve seven-year terms. Commissioners are nominated by the President and confirmed by the Senate. No more than three Commissioners can be of the same political party. The President chooses one Commissioner to act as Chair, with Commissioner Lina Khan serving as FTC Chair since June 2021.
The FTC was established in 1914 with the passage of the Federal Trade Commission Act. Signed into law by President Woodrow Wilson, who was a strong proponent of it, the Federal Trade Commission Act was a major response to 19th-century monopolistic trusts. Trusts and trust-busting were significant political concerns during the Progressive Era. Since its inception, the FTC has enforced the provisions of the Clayton Act, a key antitrust statute, as well as the provisions of the FTC Act, 15 U.S.C. § 41 et seq. Over time, the FTC has been delegated with the enforcement of additional business regulation statutes and has promulgated a number of regulations (codified in Title 16 of the Code of Federal Regulations). The broad statutory authority granted to the FTC provides it with more surveillance and monitoring abilities than it actually uses. :571
Following the Supreme Court decisions against Standard Oil and American Tobacco in May 1911, the first version of a bill to establish a commission to regulate interstate trade was introduced on January 25, 1912, by Oklahoma congressman Dick Thompson Morgan. He would make the first speech on the House floor advocating its creation on February 21, 1912. Though the initial bill did not pass, the questions of trusts and antitrust dominated the 1912 election.Most political party platforms in 1912 endorsed the establishment of a federal trade commission with its regulatory powers placed in the hands of an administrative board, as an alternative to functions previously and necessarily exercised so slowly through the courts.
With the 1912 presidential election decided in favor of the Democrats and Woodrow Wilson, Morgan reintroduced a slightly amended version of his bill during the April 1913 special session. The national debate culminated in Wilson's signing of the FTC Act on September 26, 1914, with additional tightening of regulations in the Clayton Antitrust Act three weeks later. The new Federal Trade Commission would absorb the staff and duties of Bureau of Corporations, previously established under the Department of Commerce and Labor in 1903. The FTC could additionally challenge "unfair methods of competition" and enforce the Clayton Act's more specific prohibitions against certain price discrimination, vertical arrangements, interlocking directorates, and stock acquisitions.
|Member||Political party||Sworn in||Term expiration*|
|Rebecca Slaughter||Democratic||May 2, 2018||September 26, 2022|
|Christine Wilson||Republican||September 26, 2018||September 26, 2025|
|Noah Joshua Phillips||Republican||May 2, 2018||September 26, 2023|
|Rohit Chopra||Democratic||May 2, 2018||September 26, 2019|
|Lina Khan (Chair)||Democratic||June 2021||September 26, 2024|
Shortly after the U.S. Senate confirmed her as a commissioner, President Biden tapped her to serve as Chair of the Commission
This is a recent list of former commissioners, starting in 1949:
|John J. Carson||1949 – 1953|
|Stephen J. Spingarn||1950 – 1953|
|Caspar Weinberger||December 31, 1969 – August 6, 1970|
|Philip Elman||April 21, 1961 – October 18, 1970|
|Miles Kirkpatrick||September 14, 1970 – February 20, 1973|
|Everette MacIntyre||September 26, 1961 – August 30, 1973|
|Mary Gardner Jones||October 29, 1964 – November 2, 1973|
|David J. Dennison Jr.||October 18, 1970 – December 31, 1973|
|Mayo J. Thompson||July 8, 1973 – September 26, 1975|
|Lewis A. Engman||February 20, 1973 – December 31, 1975|
|Calvin J. Collier||March 24, 1976 – December 31, 1977|
|Stephen A. Nye||May 5, 1974 – May 5, 1978|
|Elizabeth Hanford Dole||December 4, 1973 – March 9, 1979|
|Paul Rand Dixon||March 21, 1961 – September 25, 1981|
|David A. Clanton||August 26, 1975 – October 14, 1983|
|Michael Pertschuk||April 21, 1977 – October 15, 1984|
|George W. Douglas||December 27, 1982 – September 18, 1985|
|James C. Miller III||September 30, 1981 – October 5, 1985|
|Patricia P. Bailey||October 29, 1979 – May 15, 1988|
|Margo Machol||November 29, 1988 – October 24, 1989 [recess appointment]|
|Daniel Oliver||April 21, 1986 – August 10, 1989|
|Terry Calvani||November 18, 1983 – September 25, 1990|
|Andrew Strenio||March 17, 1986 – July 15, 1991|
|Deborah K. Owen||October 25, 1989 – August 26, 1994|
|Dennis A. Yao||July 16, 1991 – August 31, 1994|
|Christine A. Varney||October 17, 1994 – August 5, 1997|
|Janet D. Steiger||August 11, 1989 – September 28, 1997|
|Roscoe B. Starek III||November 19, 1990 – December 18, 1997|
|Mary L. Azcuenaga||November 27, 1984 – June 3, 1998|
|Robert Pitofsky||June 29, 1978 – April 30, 1981 & April 11, 1995 – May 31, 2001|
|Sheila F. Anthony||September 30, 1997 – August 1, 2003|
|Timothy Muris||June 4, 2001 – August 15, 2004|
|Mozelle W. Thompson||December 17, 1997 – August 31, 2004|
|Orson Swindle||December 18, 1997 – June 30, 2005|
|Thomas B. Leary||November 17, 1999 – December 31, 2005|
|Deborah Platt Majoras||August 16, 2004 – March 29, 2008|
|Pamela Jones Harbour||August 4, 2003 – April 6, 2010|
|William Kovacic||January 4, 2006 – October 3, 2011|
|J. Thomas Rosch||January 5, 2006 - Sept 2012|
|Jon Leibowitz||March 2, 2009 – March 7, 2013|
|Joshua D. Wright||January 11, 2013 – August 24, 2015|
|Julie Brill||April 6, 2010 – March 31, 2016|
|Edith Ramirez||April 5, 2010 – February 10, 2017|
|Terrell McSweeny||April 28, 2014 – April 27, 2018|
|Joseph Simons||May 1, 2018 – January 29, 2021|
The Bureau of Consumer Protection's mandate is to protect consumers against unfair or deceptive acts or practices in commerce. With the written consent of the Commission, Bureau attorneys enforce federal laws related to consumer affairs and rules promulgated by the FTC. Its functions include investigations, enforcement actions, and consumer and business education. Areas of principal concern for this bureau are: advertising and marketing, financial products and practices, telemarketing fraud, privacy and identity protection, etc. The bureau also is responsible for the United States National Do Not Call Registry.
Under the FTC Act, the Commission has the authority, in most cases, to bring its actions in federal court through its own attorneys. In some consumer protection matters, the FTC appears with, or supports, the U.S. Department of Justice.
The Bureau of Competition is the division of the FTC charged with elimination and prevention of "anticompetitive" business practices. It accomplishes this through the enforcement of antitrust laws, review of proposed mergers, and investigation into other non-merger business practices that may impair competition. Such non-merger practices include horizontal restraints, involving agreements between direct competitors, and vertical restraints, involving agreements among businesses at different levels in the same industry (such as suppliers and commercial buyers).
The FTC shares enforcement of antitrust laws with the Department of Justice. However, while the FTC is responsible for civil enforcement of antitrust laws, the Antitrust Division of the Department of Justice has the power to bring both civil and criminal action in antitrust matters.
The Bureau of Economics was established to support the Bureau of Competition and Consumer Protection by providing expert knowledge related to the economic impacts of the FTC's legislation and operation.
|Enforcement authorities and organizations|
The FTC investigates issues raised by reports from consumers and businesses, pre-merger notification filings, congressional inquiries, or reports in the media. These issues include, for instance, false advertising and other forms of fraud. FTC investigations may pertain to a single company or an entire industry. If the results of the investigation reveal unlawful conduct, the FTC may seek voluntary compliance by the offending business through a consent order, file an administrative complaint, or initiate federal litigation. During the course of an regulatory activities, the FTC is authorized to collect records, but not on-site inspections. 23:
Traditionally an administrative complaint is heard in front of an independent administrative law judge (ALJ) with FTC staff acting as prosecutors. The case is reviewed de novo by the full FTC commission which then may be appealed to the U.S. Court of Appeals and finally to the Supreme Court.
Under the FTC Act, the federal courts retain their traditional authority to issue equitable relief, including the appointment of receivers, monitors, the imposition of asset freezes to guard against the spoliation of funds, immediate access to business premises to preserve evidence, and other relief including financial disclosures and expedited discovery. In numerous cases, the FTC employs this authority to combat serious consumer deception or fraud. Additionally, the FTC has rulemaking power to address concerns regarding industry-wide practices. Rules promulgated under this authority are known as Trade Rules.
In the mid-1990s, the FTC launched the fraud sweeps concept where the agency and its federal, state, and local partners filed simultaneous legal actions against multiple telemarketing fraud targets. The first sweeps operation was Project Telesweepin July 1995 which cracked down on 100 business opportunity scams.
In 1984,the FTC began to regulate the funeral home industry in order to protect consumers from deceptive practices. The FTC Funeral Rule requires funeral homes to provide all customers (and potential customers) with a General Price List (GPL), specifically outlining goods and services in the funeral industry, as defined by the FTC, and a listing of their prices. By law, the GPL must be presented to all individuals that ask, no one is to be denied a written, retainable copy of the GPL. In 1996, the FTC instituted the Funeral Rule Offenders Program (FROP), under which "funeral homes make a voluntary payment to the U.S. Treasury or appropriate state fund for an amount less than what would likely be sought if the Commission authorized filing a lawsuit for civil penalties. In addition, the funeral homes participate in the NFDA compliance program, which includes a review of the price lists, on-site training of the staff, and follow-up testing and certification on compliance with the Funeral Rule."
One of the Federal Trade Commission's other major focuses is identity theft. The FTC serves as a federal repository for individual consumer complaints regarding identity theft. Even though the FTC does not resolve individual complaints, it does use the aggregated information to determine where federal action might be taken. The complaint form is available online or by phone (1-877-ID-THEFT).
The FTC has been involved in the oversight of the online advertising industry and its practice of behavioral targeting for some time. In 2011 the FTC proposed a "Do Not Track" mechanism to allow Internet users to opt-out of behavioral targeting.
The FTC, along with the Environmental Protection Agency and Department of Justice also empowers third-party enforcer-firms to engage in some regulatory oversight, e.g. the FTC requires other energy companies to audit offshore oil platform operators. 4:
In 2013, the FTC issued a comprehensive revision of its Green guides, which set forth standards for environmental marketing.
In the 2021 United States Supreme Court case, AMG Capital Management, LLC v. FTC , the Court found unanimously that the FTC did not have power under 15 U.S.C. § 13b of the FTC Act, amended in 1973, to seek equitable relief in courts, only injunctive relief.
Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45 grants the FTC power to investigate and prevent deceptive trade practices. The statute declares that "unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful." Unfairness and deception towards consumers represent two distinct areas of FTC enforcement and authority. The FTC also has authority over unfair methods of competition between businesses.
In a letter to the Chairman of the House Committee on Energy and Commerce, the FTC defined the elements of deception cases. First, "there must be a representation, omission or practice that is likely to mislead the consumer."In the case of omissions, the Commission considers the implied representations understood by the consumer. A misleading omission occurs when information is not disclosed to correct reasonable consumer expectations. Second, the Commission examines the practice from the perspective of a reasonable consumer being targeted by the practice. Finally the representation or omission must be a material one—that is one that would have changed consumer behavior.
In its Dot Com Disclosures guide,the FTC said that "disclosures that are required to prevent deception or to provide consumers material information about a transaction must be presented clearly and conspicuously." The FTC suggested a number of different factors that would help determine whether the information was "clear and conspicuous" including but not limited to:
However, the "key is the overall net impression."
In F.T.C. v. Cyberspace.comthe FTC found that sending consumers mail that appeared to be a check for $3.50 to the consumer attached to an invoice was deceptive when cashing the check constituted an agreement to pay a monthly fee for internet access. The back of the check, in fine print, disclosed the existence of this agreement to the consumer. The FTC concluded that the practice was misleading to reasonable consumers, especially since there was evidence that less than one percent of the 225,000 individuals and businesses billed for the internet service actually logged on.
In In the Matter of Sears Holdings Management Corp. , the FTC alleged that a research software program provided by Sears was deceptive because it collected information about nearly all online behavior, a fact that was only disclosed in legalese, buried within the end user license agreement.
In November 2018 by request of US Senator Maggie Hassan, the FTC decided to investigate whether paid-for loot boxes, virtual items with random benefits in certain video games, were a form of gambling.
In September 2013, a federal court closed an elusive business opportunity scheme on the request of the FTC, namely "Money Now Funding"/"Cash4Businesses".The FTC alleged that the defendants misrepresented potential earnings, violated the National Do Not Call Register, and violated the FTC's Business Opportunity Rule in preventing a fair consumer evaluation of the business. This was one of the first definitive actions taken by any regulator against a company engaging in transaction laundering, where almost US$6 million were processed illicitly.
In December 2018, two defendants, Nikolas Mihilli and Dynasty Merchants, LLC, settled with the FTC.They were banned from processing credit card transactions but a monetary judgment of $5.8 million was suspended due to the defendants’ inability to pay.
In 2016, the FTC launched action against the OMICS Publishing Group — "OMICS Group Inc., a Nevada corporation, also doing business as OMICS Publishing Group, iMEDPub LLC, a Delaware corporation, Conference Series LLC, a Delaware corporation, and Srinubabu Gedela"— for producing predatory journals and organising predatory conferences. This action, partly in response to on-going pressure from the academic community, is the first action taken by the FTC against an academic journal publisher. The complaint alleges that the defendants have been "deceiving academics and researchers about the nature of its publications and hiding publication fees ranging from hundreds to thousands of dollars" and notes that "OMICS regularly advertises conferences featuring academic experts who were never scheduled to appear in order to attract registrants" and that attendees "spend hundreds or thousands of dollars on registration fees and travel costs to attend these scientific conferences." Manuscripts are also sometimes held hostage, with OMICS refusing to allow submissions to be withdrawn and thereby preventing resubmission to another journal for consideration. Jeffrey Beall has described OMICS as the worst-of-the-worst amongst the predatory publishers. In November 2017, a federal court in the District of Nevada granted a preliminary injunction that
"prohibits the defendants from making misrepresentations regarding their academic journals and conferences, including that specific persons are editors of their journals or have agreed to participate in their conferences. It also prohibits the defendants from falsely representing that their journals engage in peer review, that their journals are included in any academic journal indexing service, or any measurement of the extent to which their journals are cited. It also requires that the defendants clearly and conspicuously disclose all costs associated with submitting or publishing articles in their journals."
Courts have identified three main factors that must be considered in consumer unfairness cases: (1) whether the practice injures consumers; (2) whether the practice violates established public policy; and (3) whether it is unethical or unscrupulous.
In addition to prospective analysis of the effects of mergers and acquisitions, the FTC has recently resorted to retrospective analysis and monitoring of consolidated hospitals.Thus, it also uses retroactive data to demonstrate that some hospital mergers and acquisitions are hurting consumers, particularly in terms of higher prices. Here are some recent examples of the FTC's success in blocking or unwinding of hospital consolidations or affiliations:
The Federal Trade Commission Act of 1914 established the Federal Trade Commission. The Act was signed into law by US President Woodrow Wilson in 1914 and outlaws unfair methods of competition and unfair acts or practices that affect commerce.
The Robinson–Patman Act of 1936 is a United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination. Co-sponsored by Senator Joseph T. Robinson and Representative Wright Patman, it was designed to protect small retail shops against competition from chain stores by fixing a minimum price for retail products. Specifically, the law prevents suppliers, wholesalers, or manufacturers from supplying goods to “preferred customers“ at a reduced price. It also prevents coercing suppliers into restrictions as to who they can and can’t sell goods.
In the United States, antitrust law is a collection of federal and state government laws that regulate the conduct and organization of business corporations and are generally intended to promote competition and prevent monopolies. The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. Third, Section 2 of the Sherman Act prohibits monopolization.
The Fair Debt Collection Practices Act (FDCPA), Pub. L. 95-109; 91 Stat. 874, codified as 15 U.S.C. § 1692 –1692p, approved on September 20, 1977 is a consumer protection amendment, establishing legal protection from abusive debt collection practices, to the Consumer Credit Protection Act, as Title VIII of that Act. The statute's stated purposes are: to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. It is sometimes used in conjunction with the Fair Credit Reporting Act.
False advertising is described as the crime or misconduct of publishing, transmitting, or otherwise publicly circulating an advertisement containing a false, misleading, or deceptive statement, made intentionally or recklessly to promote the sale of property, goods, or services to the public. One form of false advertising is to claim that a product has a health benefit or contains vitamins or minerals that it in fact does not. Many governments use regulations to control false advertising. A false advertisement can further be classified as deceptive if the advertiser deliberately misleads the consumer, as opposed to making an honest mistake.
The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic regulator. The OFT's goal was to make markets work well for consumers, ensuring vigorous competition between fair dealing businesses and prohibiting unfair practices such as rogue trading, scams, and cartels. Its role was modified and its powers changed with the Enterprise Act 2002.
BlueHippo Funding, LLC was an installment credit company operating in the USA founded by Joseph Rensin that claimed to offer personal computers, flat-screen televisions and other high-tech items for sale to customers with poor credit. In an article published November 25, 2009 titled BlueHippo files for bankruptcy: Company blames its bank; was accused of violating settlement with FTC, Eileen Ambrose reported that the company "was forced to file for protection under Chapter 11." On Wednesday December 9, 2009, the company filed for Chapter 7 bankruptcy after having its funds frozen by their payment processor. A petition to a Delaware bankruptcy judge to release the funds was denied. The company's advertised toll-free phone number and website are no longer functioning.
The State of New Hampshire Department of Justice (NHDOJ) is a government agency of the U.S. state of New Hampshire. The NHDOJ is under the executive direction of Attorney General John Formella. The State of New Hampshire Department of Justice Building is located at 33 Capitol Street in Concord.
Movieland, also known as Movieland.com, Moviepass.tv and Popcorn.net, was a subscription-based movie download service that has been the subject of thousands of complaints to the Federal Trade Commission, the Washington State Attorney General's Office, the Better Business Bureau, and other agencies by consumers who said they were held hostage by its repeated pop-up windows and demands for payment, triggered after a free 3-day trial period. Many said they had never even heard of Movieland until they saw their first pop-up. Movieland advertised that the service had "no spyware", and that no personal information would need to be filled out to begin the free trial.
Jonathan David Leibowitz is an American lawyer who served as the Chairman of the Federal Trade Commission (FTC). As FTC Chair, Leibowitz brought a number of high-profile privacy cases against Google, Facebook and other high profile technology companies for violating consumer privacy as well as major antitrust cases against multiple pharmaceutical companies for engaging in sweetheart "pay-for-delay" deals in which brand pharma companies paid generic competitors to stay out of the market. He is a former partner at the law firm of Davis Polk.
Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent businesses from engaging in fraud or specified unfair practices in order to gain an advantage over competitors or to mislead consumers. They may also provide additional protection for the general public which may be impacted by a product even when they are not the direct purchaser or consumer of that product. For example, government regulations may require businesses to disclose detailed information about their products—particularly in areas where public health or safety is an issue, such as with food or automobiles.
Federal Trade Commission v. Sperry & Hutchinson Trading Stamp Co., 405 U.S. 233 (1972), is a decision of the United States Supreme Court holding that the Federal Trade Commission (FTC) may act against a company's “unfair” business practices even though the practice is none of the following: an antitrust violation, an incipient antitrust violation, a violation of the “spirit” of the antitrust laws, or a deceptive practice. This legal theory is termed the "unfairness doctrine."
The unfairness doctrine is a doctrine in United States trade regulation law under which the Federal Trade Commission (FTC) can declare a business practice "unfair" because it is oppressive or harmful to consumers even though the practice is not an antitrust violation, an incipient antitrust violation, a violation of the "spirit" of the antitrust laws, or a deceptive practice.
In the middle of 2009 the Federal Trade Commission filed a complaint against Sears Holdings Management Corporation (SHMC) for unfair or deceptive acts or practices affecting commerce. SHMC operates the sears.com and kmart.com retail websites for Sears Holdings Corporation. As part of a marketing effort, some users of sears.com and kmart.com were invited to download an application developed for SHMC that ran in the background on users' computers collecting information on nearly all internet activity. The tracking aspects of the program were only disclosed in legalese in the middle of the End User License Agreement. The FTC found this was insufficient disclosure given consumers expectations and the detailed information being collected. On September 9, 2009 the FTC approved a consent decree with SHMC requiring full disclosure of its activities and destruction of previously obtained information.
This report is the result of a student task force exploration of the Federal Trade Commission (FTC), completed over the course of a summer job led by Ralph Nader. The seven law student volunteers began their evaluation of the FTC in June 1968, and published a revised and expanded version of the report as a book in January 1969.
The Franchise Rule defines acts or practices that are unfair or deceptive in the franchise industry in the United States. The Franchise Rule is published by the Federal Trade Commission. The Franchise Rule seeks to facilitate informed decisions and to prevent deception in the sale of franchises by requiring franchisors to provide prospective franchisees with essential information prior to the sale. It does not, however, regulate the substance of the terms that control the relationship between franchisors and franchisees. Also, while the Franchise Rule removed the regulation of the sale of franchises from the purview of state law, placing it under the authority of the FTC to regulate interstate commerce, the FTC Franchise Rule does not require franchisors to disclose the unit performance statistics of the franchised system to new buyers of franchises. The FTC Franchise Rule was originally adopted in 1978. This followed a lengthy FTC rulemaking proceeding that began in 1971. A substantial revision of the FTC Franchise Rule was adopted by the FTC in 2007.
FTC v. Balls of Kryptonite is an enforcement action brought in 2009 by the U.S. Federal Trade Commission (FTC) in United States District Court for the Central District of California. The defendant was Jaivin Karnani, a Southern California man, his company Balls of Kryptonite LLC, and several other corporate names they did business as. In 2011 the FTC secured a court order barring Karnani and Balls of Kryptonite from engaging in many of the deceptive business practices that had brought him to the agency's attention.
FTC v. Motion Picture Advertising Service Co., 344 U.S. 392 (1953), was a 1953 decision of the United States Supreme Court in which the Court held that, where exclusive output contracts used by one company "and the three other major companies have foreclosed to competitors 75 percent of all available outlets for this business throughout the United States" the practice is "a device which has sewed up a market so tightly for the benefit of a few [that it] falls within the prohibitions of the Sherman Act, and is therefore an 'unfair method of competition' " under § 5 of the FTC Act. In so ruling, the Court extended the analysis under § 3 of the Clayton Act of requirements contracts that it made in the Standard Stations case to output contracts brought under the Sherman or FTC Acts.
Federal Trade Commission v. Vemma Nutrition Company, No. 2:15-cv-01578, was a case heard in United States District Court for the District of Arizona. On August 17, 2015 the Federal Trade Commission for the United States filed a complaint for the preliminary injunction and for other equitable relief of Vemma Nutrition Company.. The FTC, under Section 13(b) of the Federal Trade Commission Act filed for the permanent injunction of Vemma and alleged Vemma in violation of Section 5(a) of the FTC Act, 15 U.S.C § 45 (a) in connection with the advertising, marketing, promotion, and sale of opportunities to sell health and wellness drinks. The FTC alleged Vemma Nutrition Company of running an illegal pyramid scheme dependent on targeting young adults and recruitment tactics that emphasize the importance of becoming an "affiliate" and purchasing "affiliate packs" and monthly auto-delivery supply packs. Vemma further emphasizes the importance of affiliates to recruit others and "teach them to duplicate this process," offering "bonuses" as incentive for doing so. Vemma CEO Benson K. Boreyko claimed in his recruitment presentations that there is a potential for affiliates to "earn up to $50,000 a month working part time." The FTC found that affiliates are unlikely to earn substantial income and suffer, therefore being misled to participate in a deceptive act in violation of Section 5(a) of the FTC Act, 15 U.S.C § 45 (a).
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