The Essential Guide to FTC Compliance, Investigations, and Enforcement

Following an investigation, the FTC may initiate an FTC lawsuit or administrative action if it has “reason to believe” that the law is being or has been violated. Specifically, a recommendation to the full commission may be made by the trial attorneys and FTC Bureau of Consumer Protection for authorization to file a court complaint or administrative action; or, if there is insufficient evidence or other factors warranting the closure of the matter, the FTC staff may make a recommendation to close the matter and take no further action.

Following an investigation, the FTC may either close the consumer protection investigation, or recommend proceeding with enforcement. Assistant Directors of the Bureau of Consumer Protection, Regional Directors, and the Director of Federal-State and Consumer Relations are authorized to close consumer protection investigations which have not exceeded 100 work-hours. However, if initiation of the investigation required approval by the Bureau Director, such approval must be obtained for closing. Additionally, if the FTC investigation has received previous Commission consideration, Commission approval must be obtained.

If FTC staff close an FTC investigation without recommendation of further action, FTC staff may consider obtaining informal correction of the practices if it appears that the target of the investigation has acted in good faith and will make the necessary changes promptly. Regardless of whether informal corrections are requested, the FTC staff may close an investigation with a private closing letter sent to the target of the investigation.

If, after an investigation, FTC staff believe that grounds exist to support a recommendation for a complaint, FTC staff ordinarily offer the instagatory target the ability to enter either a consent agreement with the FTC or a stipulated injunction and final order for entry in a federal court. If the investigatory target does not agree to a consent agreement or final court order (or if he or she is otherwise not offered one), FTC staff will recommend to the Commission that a complaint be filed. FTC staff normally informs the target of the investigation that the complaint recommendation will be forwarded to the Commission. The target of the potential enforcement action will ordinarily have an opportunity to make a written submission to the Bureau Director and the Commission. Additionally, the enforcement target may also request meetings with the Bureau Director and each Commissioner, which will be granted at the discretion of the Director and each Commissioner.

If the Commission votes to approve a complaint, FTC staff will promptly file the complaint in the appropriate forum and serve the complaint on the defendants.

If you have an FTC legal matter, call us at 415-955-1155, ext. 120, or contact one of our FTC defense lawyers directly.