Consumer rights groups say the Federal Trade Commission should investigate itself for false advertising after the agency backtracked on cash payouts.
As part of its $575 million settlement with Equifax, the FTC initially stated victims of the historic hack would get either 10 years of free credit reporting, or a $125 cash payout if they already had such services. But it didn’t take long for the FTC to backtrack on its promise of modest cash compensation, claiming it found the public interest in free money “unexpected.”
Now consumer group Demand Progress says the agency should investigate itself for incompetence, empty promises, and for violating the FTC Act. The FTC Act prohibits unfair and deceptive advertising “in any medium,” but the FTC has long been criticized for turning a blind eye to blatant examples of misleading marketing across numerous sectors.
As Motherboard noted last week, the $31 million the FTC set aside for the payouts was hugely inadequate, covering just 240,000 of the 147 million victims of the hack and leak. Privacy and legal experts say the agency’s woeful underestimation was a bait and switch.
In turn, Demand Progress has launched a new petition urging its members to reach out to the “failed trade commission” and demand the agency investigate its own screw up.
“We demand the Federal Trade Commission and its Office of Inspector General launch an immediate investigation into the Federal Trade Commission’s false and deceptive advertising surrounding its settlement with Equifax,” the petition states.
“In addition to a full investigation, we demand the FTC issue an immediate cease and desist to itself and prohibit itself from making future deceptive statements,” Demand Progress Executive Director David Segal said in a statement provided to Motherboard.
Both the Equifax and Facebook settlements made headlines for the “record” fines being levied against both companies. But such framing isn’t particularly relevant when the banking, tech, and telecom industries are not only making record profits off of the collection and sale of private user data, but have repeatedly failed to keep that data private and secure.