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AG Nessel Files Supreme Court Brief Supporting FTC Authority to Seek Consumer Restitution

LANSING – Michigan Attorney General Dana Nessel joined a bipartisan coalition of 23 other attorneys general in filing an amicus brief supporting the Federal Trade Commission’s (FTC) ability to seek restitution for consumers from fraudulent or deceptive business operations.

In the case of the Federal Trade Commission v. Credit Bureau Center LLC, the 7th Circuit Court of Appeals determined that the FTC does not have the authority to obtain restitution when providing redress to victims of fraud or dishonest business practices.

The attorneys general are asking the United States Supreme Court to reverse the lower court’s decision. In the amicus brief, the attorneys general argue that restitution is a critical enforcement tool for the FTC and preventing the commission from obtaining restitution significantly weakens the FTC’s ability to protect consumers under the Federal Trade Commission Act.

“To protect consumers from fraudulent activities, government agencies need to have the proper tools,” Nessel said. “The FTC’s use of restitution helps people get back what was taken from them and deters bad actors from committing dishonest acts. I urge the United States Supreme Court to overturn the lower court’s ruling and side with victimized consumers, rather than deceptive businesses that only care about the bottom line.”

The attorneys general argue that the 7th Circuit’s unprecedented decision will negatively harm states and their residents and will impede federal-state collaborations to combat unfair and deceptive practices. In 2018 alone, the FTC’s Bureau of Consumer Protection issued more than $122 million in refunds to consumers throughout the country.

States rely on partnerships with federal regulators such as the FTC to protect millions of Americans from unfair and deceptive business practices. To make victims of fraud whole and to adequately deter further wrongdoing, regulators typically seek injunctive relief that requires defendants to cease illegal conduct and return illegally acquired profits to consumers. While Attorney General Nessel and many attorneys general around the country obtain consumer restitution through their own enforcement actions, states also benefit from the FTC’s independent authority to investigate and address violations of federal law.

The coalition also notes that the 7th Circuit’s decision upends decades of precedent and will result in defendants attempting to “forum shop” to seek favorable determinations. The attorneys general state defendants have already attempted to transfer cases to the 7th Circuit to take advantage of the decision. As a result, the coalition claims the decision has created confusion where none previously existed.

Joining Nessel in filing the brief are the attorneys general of Illinois, Alaska, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Indiana, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Puerto Rico, South Dakota, Vermont, Virginia and Wisconsin.

The amicus brief can be found here.

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