April 26, 2021
The Honorable Maria Cantwell, Chair
The Honorable Roger Wicker, Ranking Member
Committee on Commerce, Science, and Transportation
Washington, D.C. 20510
The Honorable Frank Pallone, Jr. Chairman
The Honorable Cathy McMorris Rodgers, Ranking Member
Committee on Energy and Commerce
U.S. House of Representatives
Washington, D.C. 20515
Re: Call to update Federal Trade Commission’s enforcement tools under FTC Act, Section 13(b)
Dear Chairs Cantwell and Pallone and Ranking Members Wicker and McMorris Rogers:
The undersigned Military and Veteran Service Organizations (MSO/VSOs), write to convey our strong support for legislative action to ensure that the Federal Trade Commission (FTC) has the full range of equitable authority to curb unfair, deceptive, fraudulent and anticompetitive acts and practices. The FTC’s ability to protect consumers has been seriously compromised by the Supreme Court’s recent decision in AMG Capital Management, LLC, et al. v. Federal Trade Commission. The Court’s holding means that the FTC does not have the ability to obtain equitable monetary relief under section 13(b) of the Federal Trade Commission Act.
The active duty servicemembers, family members, survivors, unactivated reservists and veterans that we represent are financially endangered by this new ruling. We urge you to amend the FTC Act to ensure that the FTC can seek injunctive as well as monetary and equitable remedies on behalf of those that we represent who are affected by violations of the law. Additionally, we think that the FTC’s powers to protect consumers should be expanded.
Over the last four years, the FTC has logged more than 378,000 reports from veterans. Over 24,000 of those reported a loss, with total losses of $205 million. One of the top five complaints from our community is imposter scams, where the scammer usually claims to be from the government, a business, an online romance or tech support. Veterans had a median loss of $755, compared to active duty servicemembers who reported a median loss of $500 over the same period.
In recent years the FTC has been very active when it comes to protecting the interests of servicemembers, the reserve component, their families, survivors and veterans. In 2017 it forced Victory Media, the owner of a website whose “military-friendly” rankings of colleges and universities allegedly functioned as paid advertisements for institutions, to disclose to readers of its website and publications that its rankings are paid endorsements. No disgorgement or reimbursement was ordered in the case, but it isn’t clear that Victory Media would have been willing to reach a settlement without that threat.
The FTC also entered into a record $191 million settlement with the University of Phoenix because it lied during a marketing campaign that promised consumers a career fast-track to “partner” companies like Microsoft and Twitter when in fact no such partnerships existed. That FTC order returned millions of dollars to students who had been defrauded, many of them servicemembers and veterans using Department of Defense and Department of Veterans’ Affairs education benefits.
Earlier in 2019 the FTC brought an enforcement action against Career Education Corporation (“CEC”) for recruiting students who were lured to the school based on false pretenses. As alleged in the FTC’s complaint, the company used lead generators who falsely claimed to be affiliated with the U.S. military, tricking students who were looking to serve their country. CEC’s lead generators also induced consumers to submit their information under the guise of providing job or benefits assistance, falsely told consumers that their information would not be shared, and both CEC and its lead generators illegally called consumers registered on the National Do Not Call (DNC) Registry. That FTC action resulted in a $30 million settlement.
The investigation into CEC grew out of an earlier FTC action to shut down several websites that targeted potential military recruits and then used their personal information to market for-profit colleges. The websites, which were operated by Sunkey Publishing Inc. and Fanmail.com, used domain names like army.com, armyenlist.com, and air-force.com and appeared to be official recruiting pages. The companies then sold the information generated from the sites to companies like CEC for $15 to $40 for each lead. Telemarketers who called to follow up on leads would continue to impersonate members of the military. The FTC settlement required Sunkey Publishing and Fanmail.com to relinquish the website domains and included civil penalties against both companies.
In 2016, Devry University settled with the FTC for $100 million over allegations that DeVry misled students, many of them using Department of Defense and Department of Veterans’ Affairs education benefits, in violation of the FTC Act by claiming that 90 percent of graduates actively seeking employment landed jobs in their field within six months of graduation. Advertisements making these claims appeared on television and radio, as well as online and in print and other media. The FTC also alleged that DeVry misled students by claiming that graduates with bachelor’s degrees, on average, had 15 percent higher incomes one year after graduation than the graduates with bachelor’s degrees from all other colleges or universities.
It is not clear that any of these FTC actions, which compel critical things like student debt relief and revocation of taxpayer subsidies, and which serve to protect of hard-earned military education benefits, would have been possible without the FTC’s powers under section 13(b).
It is crucial that Congress takes action to protect American servicemembers, the reserve component, their families, survivors, and veterans before emboldened scam artists try to cheat them out of their hard-earned benefits.
 Available at: https://www.consumer.ftc.gov/blog/2020/11/veterans-and-imposter-scams-0?utm_source=govdelivery (last accessed April 25, 2021).
 Andrew Kreighbaum, Crackdown on ‘Pay to Play’ for ‘Military-Friendly’ Colleges, Inside Higher Ed (2018), https://www.insidehighered.com/news/2017/10/20/ftc-settlement-says-rankings-military-friendly-colleges-were-deceptive-promotions (last accessed Apr 26, 2021).
 Statement of Commissioner Rohit Chopra, In the Matter of University of Phoenix Commission File Number 1523231 (December 10, 2019), available at: https://www.ftc.gov/system/files/documents/public_statements/1557180/152_3231_statement_of_commissioner_rohit_chopra_0.pdf (last accessed April 25, 2021).
 FTC Press Release, “Operator of Colorado Technical University and American InterContinental University Will Pay $30 Million to Settle FTC Charges it Used Deceptive Lead Generators to Market its Schools” (August 27, 2019), available at:
https://www.ftc.gov/news-events/press-releases/2019/08/operator-colorado-technical-university-american-intercontinental (last accessed April 25, 2021).
 Andrew Kreighbaum, FTC Shuts Down Scam Military Websites, Inside Higher ED (2017), https://www.insidehighered.com/quicktakes/2018/09/07/ftc-shuts-down-scam-military-websites (last accessed April 26, 2021).
 FTC Press Release, DeVry University Agrees to $100 Million Settlement with FTCLetter of Support for HR 2668