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FTC to focus on consumer injury, minimizing paperwork requests to companies

By Diane Bartz

By Diane Bartz

WASHINGTON (Reuters) - The Federal Trade Commission will focus on fraud and be judicious in making paperwork requests when it opens an investigation into a company, acting FTC Chairman Maureen Ohlhausen said in a speech on Thursday.

Ohlhausen called fighting fraud the "core of the FTC's consumer protection mission."

"These cases may not forge new legal ground or prompt huge headlines but such actions defend the consumer harmed by an unscrupulous con artist," she said at an American Bar Association Consumer Protection Conference in Atlanta, according to an advance text of her speech.

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Taking a cue from President Donald Trump's interest in cutting red tape, Ohlhausen said that she would push to streamline agency information requests. "Such requests impose large compliance costs on legitimate companies," she said.

During the Obama administration, the FTC was aggressive in going after companies such as Wyndham Hotels <WYN.N> that it alleged were sloppy with consumer data and also pursued companies like POM Wonderful that made health claims the agency felt were inadequately substantiated.

That said, she said she supported the FTC's decision to go after the infidelity-dating website Ashley Madison after a 2015 data breach resulted in a leak of details on 36 million user accounts. She noted that people committed suicide after they were found to have used the site.

"Although monetary injury has been our primary focus, we have seen substantial injury arise from the exposure of more than just financial information," she said.

But she disagreed with other assessments of harm, including the agency's $20 million settlement with ride-hailing company Uber last month over allegations it exaggerated earnings claims to attract drivers. "It was an order of magnitude higher than our best evidence of consumer harm," she said.

But John Simpson of Consumer Watchdog, which has pushed the FTC to be more aggressive, strongly supported the Uber settlement. "Disgorgement seems to be the only way to get the attention of these companies," he said.

Alden Abbott of the conservative Heritage Foundation called the acting chairman's priorities "good steps forward. She's careful, she's judicious and focused on consumer injury."

The FTC normally has five members but two seats are vacant. A third becomes vacant next week when former Chairwoman Edith Ramirez steps down, leaving just Ohlhausen and Democrat Terrell McSweeny at the agency. It is not known when Trump will name a permanent chair or fill the three empty seats.

(Reporting by Diane Bartz; Editing by Cynthia Osterman)

 
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