On April 4, 2022, the Consumer Protection Division (CPB) of the Civil Division of the United States Department of Justice (DOJ) released its first-ever annual “Recent Highlights” report. The report outlines CPB’s accomplishments from October 2020 to December 2021 and provides insight into enforcement trends businesses can expect going forward as CPB’s enforcement activities continue to ramp up .
The CPB has civil and criminal authority which its nearly 100 lawyers exercise through criminal prosecutions and civil actions in several areas, including violations of laws and regulations on health, safety, economic activity and integrity of consumer identity.
The full text of the report is available here. We provide some of the top takeaways below:
- Summary of 2021: In just over a year covered by the report, the CPB resolved cases resulting in $6.38 billion in payouts to the United States and victims. CPB attorneys have filed actions against 200 defendants, handled 55 defensive cases, and entered into more than 50 corporate resolutions. In their efforts, CPB attorneys used new legal tools available to them, including the criminal provisions of the Consumer Product Safety Act, the civil sections of the Controlled Substances Act, and numerous administered statutes and rules. by the Federal Trade Commission (FTC).
- Consumer health and safety: Much of CPB’s resources are devoted to enforcement work to protect consumer health and safety.
- During the reporting period, the CPB reported criminally indicting 53 individuals and companies and initiating civil suits against 30 individuals and companies, resulting in 38 individual convictions and 28 corporate resolutions relating to health and consumer safety.
- The report also highlighted the CPB’s role in enforcing the Federal Food, Drug and Cosmetic Act (FDCA). Not surprisingly, from October 2020 to December 2021, the CPB used this enforcement authority to crack down on drugs and devices marketed as treatments or cures for COVID-19 without the backing of reliable scientific backing.
- In March 2021, an Indian drugmaker was ordered to pay $50 million following a guilty plea in connection with allegations that it destroyed records ahead of a state Food and Drug Administration inspection. -United.
- In July 2021, a US manufacturer agreed to pay $22 million to resolve a case involving allegations that it mislabeled surgical gowns to indicate that these gowns offered a higher degree of protection against virus penetration than they actually didn’t.
- Consumer Fraud and Privacy: The CPB handles litigation under laws administered by the FTC relating to consumer protection against unfair and deceptive behavior and consumer privacy.
- The report counts 43 people and companies charged in criminal cases, 82 people and companies prosecuted in civil actions, 21 people convicted and 23 company resolutions relating to consumer fraud.
- In December 2020, Dish Network LLC agreed to pay $210 million for Telemarketing Sales Rule (TSR) and Federal Trade Commission Act violations, the largest penalty ever paid to resolve telemarketing violations. In fact, the penalty exceeded the total penalties paid in the United States by all prior TSR violators.
- In January 2021, a US data management company reached a settlement with the CPB and the US Attorney’s Office for the District of Colorado, admitting that some employees knowingly sold information associated with more than 30 million Americans to customers engaged in fraudulent direct mail schemes. The company agreed to pay $150 million and adopt extensive compliance and reporting measures.
- In May 2021, a US home security company was ordered to pay $15 million in civil penalties and $5 million in consumer redress for violations of the Fair Credit Reporting Act (FCRA). The company had failed to implement an identity theft prevention program, which allowed some sales representatives to obtain credit reports without consumer consent. The civil penalty imposed was the highest ever imposed for alleged FCRA violations.
- In December 2021, an ad exchange was ordered to pay $2 million for, among other things, allegedly collecting and storing location data and other personal information from children under 13 without notice or consent. parenting, in violation of the Children’s Online Privacy Protection Act and facilitating the use of this data for targeted advertising on hundreds of child-directed apps.
CPB’s size has more than tripled in recent years, and this report reinforces CPB’s continued desire to use its enforcement mechanisms aggressively. As the report shows, it is an active partner in filing cases based on investigations by the FTC and other agencies. When, for example, the FTC seeks to resolve investigations involving civil penalty issues, companies may need to engage in negotiations with the FTC and the DOJ, as civil penalty issues must be referred to the DOJ before they can be filed. Companies operating in areas subject to the CPB’s enforcement authority should take steps to familiarize themselves with its powers, processes and procedures.
It is already clear that in 2021, the CPB had a significant presence in the enforcement of consumer protection laws. We anticipate this trend to increase in 2022 and beyond as the CPB continues to creatively use the laws under its authority to prosecute individuals and corporations.
For advice and assistance with these issues, contact Chris Olsen, Lydia Parnes, Maneesha Mithal, or another member of Wilson Sonsini privacy and cybersecurity practice.