What the FTC Does to Protect Consumers, and How to Report Problems

When companies hide fees, run scams, make false advertising claims or fail to protect your personal data, there’s a federal agency whose job is to step in: the Federal Trade Commission. Understanding what the FTC does, and how to use its resources, can help you protect yourself and report problems when something goes wrong.

What the FTC is

The Federal Trade Commission is an independent federal agency created in 1914. It has two main missions: protecting consumers from deceptive and unfair business practices, and promoting competition so markets stay open and fair.

The FTC is led by commissioners appointed by the president and confirmed by the Senate. It enforces a wide range of consumer protection and competition laws.

How the FTC protects consumers

The FTC works to stop deceptive and unfair business practices across much of the economy. Deceptive practices involve misleading consumers, such as making false claims about a product. Unfair practices cause substantial harm that consumers can’t reasonably avoid.

False or misleading advertising is a major focus. The FTC requires that advertising claims be truthful and backed by evidence. That includes claims about health benefits, product performance and earnings potential, as well as endorsements and online reviews.

The FTC also fights scams of all kinds, including impostor scams, where scammers pretend to be government agencies, businesses, relatives or romantic interests; job scams; investment scams; and fake prize or sweepstakes schemes. It tracks scam trends and warns the public about new tactics.

Hidden fees and difficult subscription cancellation processes are other areas of focus. The FTC has taken action against companies that bury fees in fine print or make it unreasonably hard to cancel recurring charges.

Privacy and data security are increasingly important. The FTC can take action against companies that misrepresent how they use personal data or fail to take reasonable steps to protect it.

What the FTC can do

When it finds violations, the FTC can investigate, bring lawsuits in federal court or through its own administrative process, and reach settlements with companies. Settlements may require companies to change their practices, and in some cases, the FTC returns money to consumers who were harmed.

The FTC generally doesn’t resolve individual complaints, but the reports it receives help it identify patterns, choose cases and work with other law enforcement agencies.

Promoting competition

The FTC’s second mission is protecting competition. It reviews proposed mergers and acquisitions to determine whether they could substantially reduce competition and harm consumers. It also investigates business practices that may unfairly limit competition.

Competition matters to your wallet. When companies compete, consumers generally benefit from lower prices, more choices, better quality and more innovation.

How to report a problem

If you’ve encountered fraud, a scam or a bad business practice, you can report it at ReportFraud.ftc.gov. The process asks what happened, how you were contacted and whether you lost money. Your report goes into a database used by the FTC and other law enforcement agencies to spot patterns and build cases.

Even if you didn’t lose money, reporting helps protect others. Scams often target many people at once, and your report can help authorities act sooner.

What to do right away if you’re scammed

If you paid a scammer, act quickly. Contact your bank or credit card company to report the fraud and ask about reversing the charge. If you paid with a gift card, contact the company that issued the card. If you sent money through a wire transfer or payment app, contact the company immediately. The FTC’s website offers guidance on what to do based on how you paid.

Free consumer resources

The FTC publishes free consumer advice at consumer.ftc.gov on topics including spotting and avoiding scams, buying a car, managing debt, protecting your personal information, shopping online and recognizing job and business opportunity scams. These resources are written in plain language and are available in multiple languages.

You can also sign up for FTC consumer alerts by email to stay informed about new scams and consumer protection news.

Refunds from FTC cases

When the FTC wins refunds for consumers, it may contact affected people directly by mail or email, or send payments automatically. The FTC says it never requires you to pay a fee or provide bank account information to get a refund. Anyone who asks for payment to release a refund is likely running a scam. You can check legitimate refund programs at ftc.gov/refunds.

Other agencies that can help

Depending on the problem, other agencies may also help. The Consumer Financial Protection Bureau handles complaints about financial products like credit cards, loans and bank accounts. Your state attorney general’s office handles many consumer protection issues locally. Knowing where to turn makes it easier to get help when you need it.