Civil penalties can help the Commission deter conduct that harms consumers. Because they can exceed what a wrongdoer earned through their misconduct, penalties send a clear message that preying on consumers will not be profitable.
One way the Commission can obtain penalties against a company that acted unfairly or deceptively is through the Penalty Offense Authority, found in Section 5(m)(1)(B) of the FTC Act, 15 U.S.C. §45(m)(1)(B). Under this authority, the Commission can seek civil penalties if it proves that (1) the company knew the conduct was unfair or deceptive in violation of the FTC Act and (2) the FTC had already issued a written decision (see below) that such conduct is unfair or deceptive.
In order to trigger this authority, the Commission can send companies a “Notice of Penalty Offenses.†This Notice is a document listing certain types of conduct that the Commission has determined, in one or more administrative orders (other than a consent order), to be unfair or deceptive in violation of the FTC Act. Companies that receive this Notice and nevertheless engage in prohibited practices can face civil penalties of up to $50,120 per violation. As required by federal statute, the FTC adjusts the amounts of its civil penalty maximums for inflation every January.
That a company is sent a Notice does not indicate that the Commission has reason to believe it is breaking the law. Rather, the Commission sends these Notices to ensure that companies understand the law – and that they are deterred from breaking it.
Copies of recently distributed Notices and the administrative determinations cited in the Notices can be found at the links below.
Recent Notices
Penalty Offenses Concerning Misuse of Information Collected in Confidential Contexts
The FTC has issued a Notice that it has determined that certain acts or practices concerning misuse of information collected in confidential contexts are deceptive or unfair and violate the FTC Act.
Penalty Offenses Concerning Substantiation
The FTC has issued a Notice that it has determined that certain acts or practices concerning substantiation of product claims are deceptive or unfair and violate the FTC Act.
Penalty Offenses Concerning Money-Making Opportunities
The FTC has issued a Notice that it has determined that certain acts or practices used to attract participants to money-making opportunities are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Endorsements
The FTC has issued a Notice that it has determined that certain acts or practices in the use of endorsements and testimonials are deceptive or unfair and violate the FTC Act.
Penalty Offenses Concerning Education
The FTC has issued a Notice that it has determined that certain acts or practices in the education marketplace are deceptive or unfair and violate the FTC Act.
Older Notices
Penalty Offenses Concerning Auto Rentals
The FTC has issued a Notice that it has determined that certain acts or practices concerning automobile rentals are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Bait & Switch
The FTC has issued a Notice that it has determined that bait and switch sales practices are unfair or deceptive trade practices, and violate the FTC Act.
Penalty Offenses Concerning Business Opportunities
The FTC has issued a Notice that it has determined that certain acts or practices used in the advertising or promotion of business opportunities are deceptive or unfair, and violate the FTC Act.
Penalty Offenses Concerning Debt Collection
The FTC has issued a Notice that it has determined that certain acts or practices used in the collection of debts are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Damaged or Defective Merchandise
The FTC has issued a Notice that it has determined that certain acts or practices involving the sale of merchandise which is damaged or defective or different from that ordered are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Energy Savings
The FTC has issued a Notice that it has determined that certain acts or practices involving the advertising of home improvement materials or products are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Feather & Down
The FTC has issued a Notice that it has determined that certain acts or practices in connection with the disclosure of the filling contents of feather and down products are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Fur
The FTC has issued a Notice that it has determined that certain acts or practices concerning labeling, invoicing or advertising of furs or fur products are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Home Improvement
The FTC has issued a Notice that it has determined that certain acts or practices concerning the advertising and sale of home improvement products are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Imitation Coins
The FTC has issued a Notice that it has determined that manufacturing or importing any imitation numismatic item which is not plainly and permanently marked “COPY†is an unfair or deceptive, and violates the FTC Act.
Penalty Offenses Concerning Idea or Invention Promotion
The FTC has issued a Notice that it has determined that certain acts or practices used in the advertising or marketing of idea or invention promotion or development services are deceptive or unfair, and violate the FTC Act.
Penalty Offenses Concerning the Sale of Used and/or Rebuilt Merchandise
The FTC has issued a Notice that it has determined that certain acts or practices involving the sale of used and/or rebuilt merchandise are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Sales Practices
The FTC has issued a Notice that it has determined that certain acts or practices involving the sale of merchandise or services are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Textiles
The FTC has issued a Notice that it has determined that certain acts or practices concerning textile fiber products are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Toys
The FTC has issued a Notice that it has determined that certain acts or practices regarding the advertising and packaging of toys are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Unordered Merchandise
The FTC has issued a Notice that it has determined that certain acts or practices involving sending and/or attempting to collect payment for unordered merchandise are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Weight Loss
The FTC has issued a notice that it has determined that certain acts or practices concerning the promotion of products and plans for weight control are unfair or deceptive, and violate the FTC Act.
Penalty Offenses Concerning Wool
The FTC has issued a Notice that it has determined that certain practices with respect to wool products are unfair or deceptive, and violate the FTC Act.