FTC Authority to Seek Broad Injunctive Relief for Deceptive Fee Disclosures Affirmed by Federal Court
In January 2026, an U.S. Court of Appeals for the Eleventh Circuit unanimously upheld a federal district court’s summary judgment ruling in favor of the Federal Trade Commission relating to advertising disclosure practices. In doing so, the court cited “overwhelming” evidence of unfair and deceptive acts and practices.
By way of background, in 2019 FTC lawyers initiated an enforcement action in the U.S. District Court for the Northern District of Georgia alleging five violations of Section 5 of the FTC Act against a company and its CEO alleging that the company engaged in deceptive advertising by making false promises and representations regarding various products. Additionally, the FTC alleged that the company engaged in unfair practices by charging unauthorized add-on and late fees, and by making deceptive billing representations. The FTC also alleged that marketing materials failed to clearly and conspicuously disclose various fees.
In 2022, the district court entered summary judgment in favor of the FTC on liability. In 2023, the court granted the FTC’s motion for permanent injunction mandating the manner in which fees are disclosed and consent obtained. With respect to the former, clear, conspicuous, unavoidable and comprehensible disclosures. And a separate affirmative act of express informed consent before charging fees or enrolling customers with respect to the latter.
Interestingly, the district rejected an attempt by FTC attorneys to dismiss or stay the case so that it could pursue an administrative action before an Administrative Law Judge and recover redress under Section 19(a)(2).
A noteworthy aspect of this decision pertains to individual liability. Here, the court opined that there was evidence that the CEO had actual knowledge of – or was involved in – conduct relating to four of the five counts. Evidence included internal communications.
Takeaway: Notwithstanding the AMG Capital Management, LLC v. FTC decision (which restricted the FTC’s ability to obtain monetary relief under Section 13(b) of the FTC Act), the FTC retains broad authority to seek and obtain forward-looking injunctive relief for unfair or deceptive advertising acts and practices, particularly where deceptive advertising or pricing practices are systemic. The manner in which fees are disclosed and consent to incur such fees are legal regulatory priorities, particularly where fee disclosures and consent mechanisms are found to be hidden behind hyperlinks or otherwise inadequate. Small business qualify as “consumers” under the FTC Act. Automatic enrollment in fees without sufficiently clear and conspicuous disclosures expose marketers to allegations of violation of the FTC Act’s prohibition on unfair or deceptive acts or practices. Individual liability remains a legitimate area of inquiry in FTC enforcement matters where knowledge and participation are established.
Richard B. Newman is an advertising practices attorney at Hinch Newman LLP.
Informational purposes only. Not legal advice. May be considered attorney advertising.
