Action Fairness on Your Own

¶ … Action Fairness

On your own or with a classmate, use a Web search engine to select and research a state or federal business-related law enacted during the past year. Why was this legislation passed? What were the arguments for and against it? How do you think the new law will affect businesses? Consumers? Society in general?

The FTC (Federal Trade) Reauthorization Act of 2008 reauthorized the Federal Trade Commission (FTC) for the first time since 1996. It was designed to enable the FTC to meet a number of new challenges posed by the current business environment. The bill authorized a 10% increase in the commission's appropriations, particularly to give consumers greater protection through the commission's watchdog function and to enable to commission to give greater supervision to international commerce over the next seven years. It also gave the FTC the authority to litigate any civil action involving the Federal Trade Commission Act (FTC Act) rather than relying upon the Department of Justice to do so, making the organization more streamlined in its bureaucratic procedures and also perhaps less partisan in nature and reliant upon the Department of Justice, which is lead by the Attorney General appointed by the president. "The proposed legislation would give the FTC authority to seek civil penalties for knowing violations of Section 5 of the FTC Act. In addressing this provision, the Commission reiterated its support for new authority to seek civil penalties in areas where its existing remedies are insufficient to achieve the law enforcement goal of deterrence. These areas include spyware, data security, and telephone records pretexting" ("FTC Chairman and Commissioners Testify before Senate Committee on Commerce, Science, and Transportation on proposed 'Federal Trade Commission Reauthorization Act of 2008'," FTC: Office of Public Affairs, 2008). Also, the bill repeals of the exemption of telecommunications common carriers from FTC jurisdiction. This would enable the FTC to protect consumers more easily from deceptive advertising, marketing, billing and collection practices by telecom common carriers as non-common carriers (Worton & Yoon 2008).

Particularly important given the subprime mortgage meltdown, it the fact that the reauthorization act makes it easier for state and federal authorities to enact rules against deceptive advertising and lending practices in the subprime mortgage lending market. This is designed to prevent the types of abuses of the recent housing bubble and bust from occurring in the future. Mortgages for individuals with less-than-stellar credit histories will be more difficult to obtain but also credit lenders will have to be stricter in terms of the methods and clarity which they use to present information to prospective lenders. Greater transparency will be required in lending practices.

The act placed more restrictive requirements on intrastate and interstate telemarketing. This limits the ability for businesses to make use of telemarketing as an advertising technique. While most people feel that telemarketers are an annoyance, above all else, telemarketers have also been accused of deceptive practices. This act will make it easier to regulate businesses that use telemarketers. Already, in November 2007, "the FTC announced six settlements and a federal court action against companies that violated the Do Not Call provisions of the Telemarketing Sales Rule, resulting in millions of dollars in civil penalties for rule violations" (FTC Chairman and Commissioners Testify Before Senate Committee on Commerce, Science, and Transportation on proposed 'Federal Trade Commission Reauthorization Act of 2008'," FTC: Office of Public Affairs, 2008).