The Federal Trade Commission (or FTC) is a powerful Government agency that’s main mission is protecting you, the consumer. Let’s learn a little more about who they are and how they do what they do, shall we?
FTC – Created to Bust the Monopolies
The Federal Trade Commission is 100 years old. It was signed into law on September 26, 1914 by President Woodrow Wilson to protect consumers and promote competition, and opened its doors a year later. This was during a time known as the Progressive Era, when there was a popular movement to end corruption in government and regulate monopolies.
At the time, huge corporations like Standard Oil and American Tobacco dominated their respected industries with little to no oversight. With the creation of the FTC and the passage of the Clayton Act, which prevented price-fixing and mergers that prevented competition, the first steps were taken to reign in their power.
Later, in 1938 the FTC was given the authority to prevent “unfair and deceptive acts or practices” in all types of businesses. Over the ensuing years, they’ve been granted oversight of telemarketers, telecommunication companies, and credit card companies.
In short, the FTC has become a powerful ally to the everyday American, and often a thorn in the side of Big Business or shady companies.
The Powers of the FTC
There are three separate branches of the Federal Trade Commission. First and perhaps foremost is the Bureau of Consumer Protection, which has the power to investigate industries and companies, as well as take them to court and sue them. The agency is especially concerned with advertising, financial products, and privacy protection. They also run the National Do Not Call Registry, which we discussed in our article about how to deal with telemarketers and spam.
Next is the Bureau of Competition, which is designed to prevent mergers that they feel stifle the free market economy and harm consumers with lack of choice and high prices. Perhaps one of the most famous antitrust cases was the action against AT&T in 1974, which resulted in the breakup of the telephone monopoly into seven “Baby Bells” (only three are still left).
Last but not least, there is the Bureau of Economics, which analyzes the financial impact of its actions as well as conducting research and studies related to its two main missions.
The FTC in Action
The Federal Trade Commission states that it “deals with issues that touch the economic life of every American” and that you may be more familiar with it than you think. From our experience at BrightReviews, this is not an empty boast.
For example, the FTC has butted heads with one of the largest “As Seen On TV” companies in the world, Telebrands, on more than one occasion. In 1999, Telebrands paid $800,000 to the FTC for not living up to a 1996 lawsuit taken up by 17 states and the FDA; they settled another $7 million FTC lawsuit for deceptive advertising in 2009.
In the largely unregulated world of anti-aging products, the FTC has attempted to alert consumers about many unsubstantiated claims. These include warnings against ones that claim to boost HGH (or Human Growth Hormone) like Natto5. “FTC staff has seen no reliable evidence to support the claim that these ‘wannabe’ products have the same effect as prescription HGH,” they announced.
They’ve also issued warning letters along with the FDA to companies that sell supposed diabetes cures and other unproven medical claims. Regularly, they issue Scam Alerts about new threats to consumer pocketbooks.
Is the FTC Working?
Recently, The Washington Post chided the FTC for not doing enough about hidden “resort fees” that hotels often charge, resulting in consumers paying more money than anticipated. As we pointed out above, the seven “Baby Bells” are now back to three giant telecoms, and Telebrands settled yet another lawsuit (this time from the state of New Jersey) and continues to operate largely unfettered.
And then there are titans like Google and Amazon, which clearly have monopolies in their industries, but so far have escaped major penalties or been forced to break up. In 2013, Google agreed to change some of their business practices, but some feel it was just a slap on the wrist. A leaked FTC document revealed some disturbing revelations about their anticompetitive practices that Motley Fool said seem to betray the Google motto of “don’t be evil.”
Still, we believe the short answer is: yes, the FTC is working. However, like many Government agencies, progress can be slow and victories for consumers far between. The FTC always has a lot on its plate, but it’s up to you, the consumer to be involved.
What You Can Do
Knowledge is power. The FTC Consumer Information section has a lot of info about Money & Credit, Homes & Mortgages, Health & Fitness, Jobs & Making Money, Privacy & Identity, as well as a Blog and informative videos. In order to find out about the latest scams, you can sign up to receive their emails here.
As we mentioned in our article about how to deal with a company that you think has scammed you, you can file a consumer complaint with the FTC here. This will not get you your money back but could put the shady company on the FTC’s radar.
Generally speaking, in order to protect yourself you need to remember the adage “if it sounds too good to be true, it probably is.”
We also encourage you to look up products right here on BrightReviews! See what other consumers have to say about them, and let others know your experience by posting a comment and a rating.
Let us know what you think of the FTC and our article below! Are they doing their job or are they behind the times?
Header Image: istockphoto.com/pabradyphoto