FTC Rules Seek Redress for Victims of Sham Schemes

New rules proposed by the Federal Trade Commission would seek redress for victims of sham money-making schemes and impose steep fines against violators, including multilevel marketers, for-profit colleges and gig economy platforms.

“Consumers, workers and prospective entrepreneurs are being bombarded with so-called money-making opportunities that promise the world but leave them deeply in debt,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a press release. “The FTC will use every tool in its toolbox to deter this economic exploitation and compensate people who got conned.”

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The proceeding initiated by the FTC challenges deceptive money-making claims that entice people into risky business ventures that often “turn into dead-end debt traps.” The FTC is taking steps to ensure targeted consumers can be compensated.

The Advanced Notice of Proposed Rulemaking (ANPR) said if the FTC’s proposed rule is adopted, it would be an important step in getting money back to victims and penalizing those responsible.

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The FTC is seeking public comment on the ANPR and other related issues.

“If, after reviewing the public comments in response to the ANPR, the Commission decides to proceed with proposing such a trade regulation rule, its next step would be to issue a notice of proposed rulemaking,” according to the press release.

The FTC has already taken a hardline stance with law enforcement measures against coaching or mentoring schemes, multi-level marketing companies, work-from-home fraudsters, gig companies, job scams and much more.

In one example of many, the FTC got financial relief to students attending DeVry University — $49.4 million in partial refunds and $50.6 million in debt relief. The school allegedly made false claims about graduates’ earning potentials.