The Federal Trade Commission (FTC) has said COVID-19-related shopping scams are its top coronavirus-related consumer complaint.
Testifying before the Senate Commerce Committee Subcommittee on Manufacturing, Trade, and Consumer Protection on its efforts to combat scams and other consumer problems related to the ongoing COVID-19 pandemic, Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said it has been monitoring consumer complaints and the marketplace for a variety of scams linked to the COVID-19 pandemic.
As well as deceptive advertising or marketing touting “miracle cures” for COVID-19, the FTC also detailed complaints about merchants offering masks, personal protective equipment and related products for sale but then failing to ship the promised products, meet delivery agreements and provide refunds to consumers.
To get these false treatment claims taken down as quickly as possible, the FTC has sent more than 250 warning letters to marketers regarding claims that their products will treat, cure or prevent COVID-19. In most cases, companies that have received such letters have taken steps to quickly correct their problematic claims. The FTC, however, reiterated that it will pursue law enforcement action when a warning letter does not stop the problem.
The FTC has also sent warning letters to multi-level marketing companies regarding COVID-19 prevention or treatment claims and earnings claims, VoIP service providers for “assisting and facilitating” illegal telemarketing or robocalls related to the COVID-19 pandemic.
Smith said it is often the case that, following reports of a health scare, deceptive advertising or marketing touting “miracle cures” quickly emerge. “The COVID-19 pandemic has put this cause and effect scenario into overdrive,” he warned. “Although some of these supposed ‘treatments’ seem facially preposterous, it is not uncommon for consumers in distress to be willing to try (and spend) anything in the hopes that it will protect them or their families from sickness or death.”
Smith said the FTC has “worked aggressively to educate consumers of all ages” about coronavirus-related scams from the onset of the pandemic, and FTC staff across the Bureau of Consumer Protection have conducted national and local outreach with partners to reach a variety of audiences. “The FTC also has provided outreach specifically on privacy during the coronavirus pandemic, a concern of many businesses and consumers as the pandemic has shifted the workplace from traditional office spaces to consumers’ homes,” he said.
“The pandemic has led to an increased reliance on technology to stay connected, and the Commission is staying abreast of privacy or data security issues that may arise so that consumers and businesses can better protect themselves in this increasingly virtual world.”
The FTC also announced complaints or settlements in more than 30 law enforcement matters, including settlements that will return more than $225m to consumers. Smith also urged Congress to pass legislation that would clarify that the agency does have authority under the FTC Act to obtain money for consumers from fraudsters and scammers.