Politics

Congress is unleashing the FTC on COVID-19 scammers

The second stimulus package will expand the FTC's authority to penalize companies promoting fake information and faulty products.

Congress is unleashing the FTC on COVID-19 scammers

The FTC will finally have the authority to immediately fine scammers touting fake COVID-19 treatments and lies about pandemic government benefits.

Photo: Al Drago/Getty Images

The FTC will finally have the authority to fine scammers touting fake COVID-19 treatments and lies about pandemic government benefits, thanks to new language in the economic stimulus package set to pass on Monday.

COVID-related scams proliferating online have overwhelmed government agencies and cost Americans more than $145 million since the beginning of the pandemic — and the FTC has been almost powerless to stop them, thanks to limitations on the agency's authority.

Now, the $900 billion coronavirus relief package is expected to include a provision enabling the FTC to penalize companies for promoting scams related to "the treatment, cure, prevention, mitigation or means of diagnosis of COVID-19" and "promises related to COVID-19 government benefits," according to bill text. The provision will ensure the agency has expanded authority to fine the companies up to hundreds of thousands of dollars for their first offense and demand refunds for customers who wasted money or divulged sensitive personal information.

Social media companies have announced new policies to crack down on misinformation surrounding COVID-19, but their platforms still regularly host scams purporting to advertise cures and vaccine access. Fraudsters are already beginning to promote early access to the COVID-19 vaccine in WhatsApp groups, online ads and robocalls, according to Pfizer's chief security officer.

"Predators are using the pandemic to take advantage of people when they are afraid and vulnerable," said Rep. Jan Schakowsky, who introduced the bill in the House. "The COVID-19 Consumer Protection Act gives the FTC the authority to go after COVID fraudsters and impose significant fines after the first offense. I'm glad we were able to include our bill in the COVID relief package. The FTC has long needed stronger tools to protect American consumers and deter bad actors during emergencies, and now it has them."

Health officials are bracing for a second spike in scams as the vaccine rolls out nationwide and Congress prepares to authorize a new round of stimulus payments. The new legislation won't go after platforms like Amazon for hosting bunk treatments, but it will give the government greater authority to go after the scammers themselves.

The FTC this year has sent more than 350 warning letters to companies and individuals it caught promoting false information and products about the pandemic, but lawmakers have criticized those efforts as toothless and limited. Warning letters don't get money back to consumers, and scammers can oftentimes launch new false campaigns under a different title. In response, the FTC asked for expanded civil penalty authority to after fraudsters.

"My view of the FTC is simple: You should be doing everything in your power to help Americans during this time of crisis," Sen. Maria Cantwell said during a hearing in August. "The COVID-19 pandemic has attracted bad actors and scam artists, including those who take advantage of people's fear and dire circumstances. We must move beyond warnings and threats in response to these unconscionable scams. We must see the FTC exercising real enforcement with real consequences to protect consumers and families when they are most vulnerable."

The COVID-19 Consumer Data Protection Act was originally introduced by Sen. Cantwell and co-sponsored by Senate Commerce Committee Chairman Roger Wicker.

"Chairman Wicker is pleased to see this important measure included in the relief package," said a Senate Commerce Committee spokesperson. "The bill would protect consumers from scammers and other bad actors seeking to defraud them and exploit the pandemic for their own personal gain."

Cantwell also sought to include provisions cracking down on COVID-19 price-gouging in the latest relief package, but aides were unable to come to a consensus on that language, according to a Hill aide.

Fintech

Data privacy and harassment could spoil Grindr’s Wall Street romance

As it pursues a long-held goal of going public, the gay dating app has to confront its demons.

Grindr may finally be a public company.

Illustration: woocat/iStock/Getty Images Plus; Protocol

Grindr's looking for more than just a hookup with Wall Street. Finding a stable relationship may be tough.

The location-based dating app favored by gay men was a pioneer, predating Tinder by three years. It’s bounced from owner to owner after founder Joel Simkhai sold it in 2018 for $245 million. A SPAC merger could be the answer, but businesses serving the LGBTQ+ community have had trouble courting investors. And Grindr has its own unique set of challenges.

Keep Reading Show less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol, covering breaking news. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

Sponsored Content

Why the digital transformation of industries is creating a more sustainable future

Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.

Inside the Crypto Cannabis Club

As crypto crashes, an NFT weed club holds on to the high.

The Crypto Cannabis Club’s Discord has 23,000 subscribers, with 28 chapters globally.

Photo: Nat Rubio-Licht/Protocol

On a Saturday night in downtown Los Angeles, a group of high strangers gathered in a smoky, colorful venue less than a mile from Crypto.com Arena. The vibe was relaxed but excited, and the partygoers, many of whom were meeting each other for the very first time, greeted each other like old friends, calling each other by their Discord names. The mood was celebratory: The Crypto Cannabis Club, an NFT community for stoners, was gathering to celebrate the launch of its metaverse dispensary.

The warmth and belonging of the weed-filled party was a contrast to the metaverse store, which was underwhelming by comparison. But the dispensary launch and the NFTs required to buy into the group are just an excuse: As with most Web3 projects, it’s really about the community. Even though crypto is crashing, taking NFTs with it, the Crypto Cannabis Club is unphased, CEO Ryan Hunter told Protocol.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Climate

The minerals we need to save the planet are getting way too expensive

Supply chain problems and rising demand have sent prices spiraling upward for the minerals and metals essential for the clean energy transition.

Critical mineral prices have exploded over the past year.

Photo: Andrey Rudakov/Bloomberg via Getty Images

The newest source of the alarm bells echoing throughout the renewables industry? Spiking critical mineral and metal prices.

According to a new report from the International Energy Agency, a maelstrom of rising demand and tattered supply chains have caused prices for the materials needed for clean energy technologies to soar in the last year. And this increase has only accelerated since 2022 began.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

Enterprise

The 911 system is outdated. Updating it to the cloud is risky.

Unlike tech companies, emergency services departments can’t afford to make mistakes when migrating to the cloud. Integrating new software in an industry where there’s no margin for error is risky, and sometimes deadly.

In an industry where seconds can mean the difference between life and death, many public safety departments are hesitant to take risks on new cloud-based technologies.

Illustration: Christopher T. Fong/Protocol

Dialing 911 could be the most important phone call you will ever make. But what happens when the software that’s supposed to deliver that call fails you? It may seem simple, but the technology behind a call for help is complicated, and when it fails, deadly.

The infrastructure supporting emergency contact centers is one of the most critical assets for any city, town or local government. But just as the pandemic exposed the creaky tech infrastructure that runs local governments, in many cases the technology in those call centers is outdated and hasn’t been touched for decades.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Latest Stories
Bulletins