§7706 Enforcement generally

Summary

The law makes the Federal Trade Commission (FTC) the main enforcer of these rules and treats violations like unfair or deceptive acts under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)), except when specific other agencies are given enforcement power for certain groups. Those other agencies enforce the rules for their industries: the Office of the Comptroller of the Currency for national banks and federal branches or agencies of foreign banks; the Board of Governors of the Federal Reserve System for most Federal Reserve member banks, certain foreign bank branches and agencies, commercial lending companies owned by foreign banks, organizations under sections 25 or 25A of the Federal Reserve Act, and bank holding companies; the FDIC Board for FDIC‑insured banks and insured state branches of foreign banks; the Director of the Office of Thrift Supervision for FDIC‑insured savings associations; the National Credit Union Administration Board for federally insured credit unions; the Securities and Exchange Commission for brokers, dealers, investment companies, and registered investment advisers; state insurance authorities for insurers (unless a state declines, in which case the FTC enforces); the Secretary of Transportation for covered air carriers; the Secretary of Agriculture for activities under the Packers and Stockyards Act; the Farm Credit Administration for Farm Credit institutions; and the Federal Communications Commission for persons covered by the Communications Act. Each agency may treat a violation as if it were a breach of an FTC trade regulation rule and may use any other legal powers it already has to enforce these requirements. The FTC has the same tools, powers, and duties it uses under the Federal Trade Commission Act to stop violations and to seek penalties and remedies. For certain parts of the law (specifically section 7704(a)(1)(C), 7704(a)(2), clause (ii), (iii), or (iv) of 7704(a)(4)(A), 7704(b)(1)(A), and 7704(b)(3)), the FTC and the FCC do not have to prove the defendant’s state of mind when asking a court to order someone to stop or to get an injunction. State attorneys general may sue in federal court on behalf of their residents for injuries from violations of specified parts of section 7704 (including some patterns or practices). A state can seek an injunction or money damages equal to actual loss or an amount calculated by multiplying each violation by up to $250, with a $2,000,000 cap for violations other than section 7704(a)(1). A court can treble (up to three times) that award if the violation was willful and knowing or included aggravated violations. Courts may consider whether the defendant had reasonable compliance practices and may award the state’s costs and attorney fees. States must give notice and a copy of their complaint to the FTC or the proper federal regulator, who may intervene, remove the case, or appeal. If the FTC or the appropriate federal agency already has a pending action against a defendant, a state cannot bring a duplicative suit while that action is pending. For most state suits seeking money, the state must show the defendant acted with actual knowledge or knew in a way that objective facts would imply. Providers of Internet access harmed by certain violations may also sue in federal court for an injunction or for damages equal to actual loss or an amount per violation (up to $100 per 7704(a)(1) violation or up to $25 for other violations), with a $1,000,000 cap for non‑7704(a)(1) violations; courts may treble awards for willful or aggravated violations and may consider compliance efforts, costs, and attorney fees.