The Essential Guide to FTC Compliance, Investigations, and Enforcement

A variety of events may prompt the FTC to open an investigation. One way in which the FTC identifies targets for investigations is through the use of data obtained from the Consumer Sentinel Network. The Sentinel Network populates a database with consumer complaints from phone calls to the FTC, complaints submitted on the FTC website, complaints received by state Attorneys General, complaints to the Better Business Bureau, and other sources within the network. The Consumer Sentinel Network’s database is an investigative cyber tool that provides Sentinel Network members with access to millions of consumer complaints. Thus, complaints to any Sentinel Network member, even if the complaints are unverified, can trigger an investigation by the FTC or other state or federal agencies. The Consumer Sentinel database allows attorneys working at the FTC to identify trends in consumer complaints, or trends regarding complaints concerning specific companies and brands, which can lead to investigations. In other words, retaining counsel to proactively implement and continually review policies to ensure FTC compliance, and having sufficient call center and customer service staffing, is crucial to limit consumer complaints and thus limit the risk of an FTC investigation.

Other triggers for investigations include formal requests from members of Congress, publications (such as media, blogs, tweets) or reports by advocacy groups or competitors that happen to be reviewed by the FTC. Additionally, during FTC investigations and enforcement actions, the FTC often discovers conduct by third parties that the FTC believes is unlawful, thus triggering separate investigations into those third parties and their actions.

Major investigations involving many different respondents require approval at the Commission level; however, most investigations may be initiated by Regional Directors and Assistant Directors, who may pursue them for 100 hours before seeking review by the Bureau Director. Before opening an investigation, staff should ordinarily have information indicating that the Commission is likely to have jurisdiction of the proposed target and over the practices, that the volume of business in or affecting commerce is substantial, that the practices to be investigated are not the primary responsibility of another federal or state or local agency, and that there will be some benefit to consumers.