The Federal Trade Commission’s (FTC) two-fold mission is “[p]rotecting the public from deceptive or unfair business practices [consumer protection] and from unfair methods of competition [antitrust] through law enforcement, advocacy, research, and education.” To maximize its benefits to the American public, the FTC should focus its consumer-protection enforcement on hardcore fraud. In light of resource constraints, it should consider dropping costly rulemakings and cases of questionable benefit to the American public and redirecting those resources to fraud enforcement.
The Importance of Anti-Fraud Enforcement
Consumer protection is the first goal highlighted in the FTC’s strategic plan (updated last month):
[The FTC] must make effective use of limited resources by targeting its [consumer protection] law enforcement . . . efforts to achieve maximum impact[.] . . . The FTC focuses on investigating and litigating conduct that causes or is likely to cause substantial injury to the public. This includes not only monetary injury, but also, for example, unwarranted health, safety, and privacy risks.
This priority statement is common sense. Particularly at a time when governmental waste is under the microscope, limited FTC consumer-protection resources should maximize efforts to combat substantial public injury—in other words, “get the most bang for the buck.”
The best way to achieve that goal is to target consumer fraud.
Earlier this month, the FTC reported its finding that consumers reported losing more than $12.5 billion to fraud in 2024, which represented a 25% increase over 2023. Moreover, the percentage who reported losing money to a fraud or scam increased by double digits. In 2023, 27% of those who reported fraud said they lost money, while that figure jumped to 38% in 2024. Major fraud categories included investment scams, imposter scams, and online-shopping fraud. Emails, telephone calls, and text messages, in that order, were the three most common contact methods used by scammers.
The public harm from fraud dwarfs other forms of measurable consumer harm. Furthermore, fraud is a pure cost to consumers, lacking any countervailing benefits. Thus, fraud cases should be—and have been—a high FTC enforcement priority.
Whenever possible, the FTC uses the money it collects from defendants to provide refunds to injured consumers and pay the related administrative costs. Information obtained from company records and the FTC’s Consumer Sentinel Network database enables the commission to locate victims. The FTC returned more than $2 billion to consumers over the 2019-2023 period.
Despite this solid FTC record, fraud (especially online fraud) is expected to continue to rise rapidly and to take on new forms. Given this challenge, an even greater proportion of FTC enforcement resources may merit being assigned to fraud cases.
Reallocating FTC Resources Toward Anti-Fraud Enforcement
FTC Chairman Andrew Ferguson appreciates the importance of prioritizing anti-fraud enforcement. In a June 2024 interview, then-Commissioner Ferguson said:
I think that, when we are sort of unleashing them [Bureau of Consumer staff] to go after fraudsters and other folks engaged in deceptive and unfair acts and practices, the Commission is doing its best work. I think we’re at our weakest when we’re trying to come up with broad rules of primary conduct.
Ferguson also expressed his concern about allocating scarce FTC resources to cases of dubious merit. In his 2024 dissent from the commission majority’s decision to file a Robinson-Patman Act antitrust case, he explained:
[T]he Commission must soundly exercise discretion about when to enforce a law. The Commission exercises its discretion poorly by bringing this case. The Commission is unlikely to prevail even on its own theory of the [Robinson-Patman] Act, and it would be an imprudent use of the Commission’s enforcement resources even if it were likely to prevail.
Questionable Consumer-Protection Rules
Broad rules are costly. They take significant agency time and resources to promulgate. They lack flexibility to deal with changes in market conditions. They impose major and often excessive costs on businesses. Finally, they may have unintended negative consequences and costs for consumers, as well. These considerations counsel great care before adopting broad rules.
The FTC has a large number of draft consumer-protection rules, not mandated by Congress, that are awaiting further FTC action. These proposed rules are of questionable legality and benefit. Given general rulemaking downsides, the commission might be wise to reallocate those consumer-protection rulemaking resources to fraud enforcement. Such a change would yield unequivocal public benefits.
Questionable Consumer-Protection Cases
Additional benefits could also accrue from dropping resource-intensive cases of dubious merit that are not related to fraud.
One such case may be the FTC’s 2023 lawsuit filed against Amazon. In the suit, the FTC charges the company with “duping” millions of consumers into unwillingly enrolling in Amazon Prime, while at the same time knowingly complicating the cancellation process for Prime subscribers who sought to end their membership.
One of Amazon’s allegedly deceptive “tricks” is making the “Prime subscription sign-up button far more conspicuous than the much smaller ‘No thanks’ button.”
How costly is it for consumers to be stuck with an unwanted Prime subscription, and how difficult is it to unsubscribe? According to a 2023 Forbes article, the costs may be rather small:
If you ended up with an unwanted Prime membership, here’s how to successfully unsubscribe.
- Sign into your account on Amazon.com.
- Follow the link to your Prime account and click on “Manage membership.”
- Select “Update, Cancel, and more.”
- Follow the on-screen instructions for cancellation.
Paid subscribers to Amazon Prime are also eligible for a full refund for the current membership period if they haven’t used Prime benefits. Amazon says on its website that it will process the refund in three to five business days.
Amazon Prime remains extremely popular both in the United States and overseas. The FTC may wish to consider how substantial the likely costs of “coerced” Prime membership are, compared to the high costs of serious fraud that could be prosecuted if the Amazon Prime case were dropped.
More generally, the FTC may also wish to examine other pending consumer-protection cases unrelated to fraud, to determine whether dropping them to pursue more fraud cases would be a better use of resources.
The Next Step Forward
Reallocating resources away from existing initiatives to fraud cases will not occur overnight. It will require majority votes to drop certain matters. It may also necessitate some internal “reprogramming” of FTC consumer-protection funds.
Far from going away, fraudsters are expanding the scope of their nefarious initiatives. The commission should closely evaluate the potentially huge benefits to the American public of such an “anti-fraud pivot,” and consider acting promptly.
