10 Ways to Avoid an FTC Investigation in 2023 - Healthcare Fraud Defense Firm
WSJ logo
Forbes logo
Fox News logo
Bloomberg logo
Los Angeles Times logo
Washington Post logo
The Epoch Times logo
CNN logo
Telemundo logo
New York Times
NY Post logo
NBC logo
Daily Beast logo
USA Today logo
Miami Herald logo
CNBC logo
Dallas News logo
Quick Practice Area Locator

10 Ways to Avoid an FTC Investigation in 2023


The Federal Trade Commission (“FTC”)—created in 1914—enforces the consumer protection laws in the United States at the federal level. These laws prevent fraud and deceptive and unfair business practices and prohibit anticompetitive conduct. The FTC’s mission is to protect consumers and promote competition. The most powerful consumer protection statute under the purview of the FTC is the Federal Trade Commission Act, which authorizes the FTC to take action to prevent unfair or deceptive business practices that could cause injury to consumers or inhibit competition.

It is important for businesses in all industries to be aware of the most common practices or conduct that trigger FTC scrutiny and an investigation. This is critical since the FTC is empowered to impose numerous sanctions such as fines, injunctions, cease and desist orders, and other significant monetary penalties.

This article provides ten guidelines for businesses to comply with FTC rules, thereby helping to avoid a lengthy FTC investigation and litigation or administrative proceeding.

1. Ensure that all claims, statements, or implications in advertisements are supported by sufficient evidence and documentation.

Pursuant to the Federal Trade Commission Act, the advertising of a business must be truthful and non-deceptive; must be supported by evidence; and must not be unfair. Conduct or behavior in practice that does not meet this standard is susceptible to FTC investigation. Within this broad area of evidence-backed advertising for businesses, the FTC has been active in investigating companies for violations thereof. For instance, on November 23, 2020, the FTC—along with the state of Maine—filed an administrative complaint against Health Research Laboratories, LLC for their continued FTC violation of marketing and selling dietary supplements based on claims unsupported by competent and reliable scientific evidence (In the Matter of Health Research Laboratories, LLC).

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden



Lynette S. Byrd
Lynette S. Byrd

Former DOJ Trial Attorney


Brian J. Kuester
Brian J. Kuester

Former U.S. Attorney

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney

Local Counsel

John W. Sellers
John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara
Linda Julin McNamara

Federal Appeals Attorney

Aaron L. Wiley
Aaron L. Wiley

Former DOJ attorney

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (DOJ)

Chris Quick
Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow
Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

2. Double check that all advertisements are truthful and are not deceptive or unfair to a reasonable person.

The FTC’s website provides useful guidance on the definitions of deceptive and unfair. An advertisement is deceptive if it contains or omits a statement that could mislead consumers acting reasonably and is material to a consumer’s decision to purchase or use a product. An advertisement is unfair if it could cause substantial consumer injury which cannot be reasonably avoided and is not outweighed by any benefit to consumers. The FTC determines whether something is deceptive or unfair by using a reasonable consumer standard. Under this standard, the FTC looks at the advertisement in question as a whole when analzying potential deceptiveness or unfairness.

Businesses could face significant challenges and uncertainty if the FTC initiates an investigation for allegedly engaging in such conduct. On November 18, 2020, the FTC sued the operators of a mobile banking app for falsely promising their users high interest rates on their accounts and 24/7 access to their funds. Instead, some users were unable to obtain access to their money for weeks or even months despite repeated requests to the company. This caused great financial harm to the app’s users, especially in the midst of the novel coronavirus (Beam Financial Inc.).

3. Ensure that your business is not broadly promoting a claim that its products or services will create or treat something.

Businesses are prohibited under federal laws and regulations from marketing or otherwise promoting that their product or service will do something such as cure a disease or lead to financial gain where such assertions are false. This behavior is strictly prohibited and investigated by the FTC to the highest degree. Businesses should be especially careful not to engage in such conduct as public fear and emotions are running high as a result of the coronavirus. Recently on October 19, 2020, the FTC approved a final administrative order with a California-based marketer for falsely claiming that a supplement consisting mainly of Vitamin C and herbal extracts was effective at treating COVID-19 and cancer (In the Matter of Marc Ching).

4. If your product involves technology, the use of the Internet, or other online or mobile application, safeguard your users’/customers’ identity and security.

Consumer privacy is an important issue for consumers and one that businesses need to handle with the utmost delicacy. The FTC encourages businesses to give their customers notice of information practices; let their customers choose how businesses can use their personally identifying information; give their customers access to this information; and provide security to the requested information. Failure to implement protocols and procedures to account for customers’ security of their personal information could lead to an FTC investigation and sanctions. For instance, on November 9, 2020, the FTC settled charges with Zoom Video Communications, Inc. in connection with allegations that the video conferencing provider engaged in unfair and deceptive practices that undermined the security of its users. Zoom was ordered to implement a robust security program to guard against these risks in the future (In the Matter of Zoom Video Communications, Inc.).

5. Implement appropriate precautions that prevent your sales and marketing teams from exploiting current public sentiment.

It needs little discussion that America is currently in a state of anxiety and uncertainty due to the consequences of the unprecedented coronavirus—the deadly virus that has taken countless of lives in the United States and the world. As society’s emotions run high, many criminals and fraudsters have sought to capitalize on such fear for financial benefit by claiming that certain products can cure you or by selling defective testing kits, as some examples. FTC Chairman Joseph Simons noted in late March 2020 that the FTC staff is working hard to prevent scammers from taking advantage of consumers through their deceptive or unfair business practices. In addition, the FTC has increased its investigative efforts to scrutinize businesses who make such claims to consumers. This is especially prevalent for businesses in the healthcare industry who ought to be most vigilant in their sales, marketing, and advertising practices (Remarks by FTC Chairman Joe Simons).

In early November 2020, the FTC requested a federal court to issue a temporary restraining order against 25 counterfeit websites for exploiting consumer COVID-19-related fears to scam them into paying for Clorox and Lysol products that the defendants never even delivered (FTC v. One or More Unknown Parties).

6. Ensure that all contracts, agreements, and legal documents do not contain provisions that would easily be regarded as violative of the FTC’s rules on fair competition and consumer protection.

The FTC’s main goals are to protect consumers and promote fair competition. Anything under this standard invites FTC scrutiny into business practices. The FTC is charged with the authority to investigate suspicious business practices, sue businesses and individuals that undermine the law, and educate consumers and businesses about their rights and obligations. For instance, with respect to anticompetitive conduct, the FTC will and often does challenge mergers, acquisitions, or other business practices that are anticompetitive or would otherwise result in higher prices, lower quality products or services, less consumer choices, or reduced innovation. The FTC is empowered to ensure that markets are open and free at all times, which is why it is so critical to double check all internal and external business agreements.

On November 20, 2020, the FTC filed an administrative complaint against two companies—Altria Group, Inc. and JUUL Labs, Inc.—regarding agreements and Altria’s acquisition of 35% interest in JUUL, both of which had the effect of eliminating competition in violation of the antitrust laws. The complaint alleges that Altria agreed to cease competing in the U.S. market for certain products in return for an ownership interest in JUUL (In the Matter of Altria Group/JUUL Labs).

7. Seek out professional advice before consummating a proposed merger or acquisition that could potentially lessen competition in the eyes of the FTC.

FTC’s Bureau of Competition enforces the nation’s antitrust laws and is dedicated to preventing mergers and acquisitions that would reduce competition to the detriment of consumers. If the FTC deems it necessary, it will take formal legal action to prevent the merger from taking place. For instance, on November 23, 2020, the FTC filed an administrative complaint and authorized a suit in federal court to block the proposed $350 million acquisition by Memphis-based Methodist Le Bonheur Healthcare of two Memphis hospitals due to concerns that the acquisition would lessen competition in the Memphis area for many inpatient medical and surgical services, increase healthcare costs, and lessen the quality of healthcare in the Memphis area (In the Matter of Methodist Le Bonheur Healthcare).

It is advisable that companies seek professional advice to gauge the legality of a proposed merger or other business transaction before the FTC seeks to scrutinize and initiate a protracted investigation that could attract negative public attention, involve substantial fees, and waste needless time.

8. If your company is in the business of handing out details regarding other individuals, ensure that the recipients have a proper purpose and that the information given is accurate, and document your conclusions and rationales.

The Fair Credit Reporting Act is enforced by the FTC and the Consumer Financial Protection Bureau (“CFPB”). It requires entities that sell and assemble consumer reports to take proactive steps to ensure that these consumer reports are given only to individuals with a proper purpose and that the reports contain accurate information. The Act also requires that businesses regulated by the CFPB provide consumers with an easy to follow means for initiating disputes and amending information in their consumer reports.

For example, at the end of July 2020, the Department of Justice (“DOJ”) sued MyLife.com and its CEO on behalf of the FTC over allegations that the company deceived consumers by falsely claiming to have information about arrest, criminal, and sex offender records when they did not and also for engaging in misleading billing and marketing business practices. This was done in an attempt to entice consumers to sign up for auto-renewing premium subscriptions (MyLife.com, Inc.)

9. Guard against possible violations of state competition and consumer protection statutes in addition to those enforced by the FTC at the federal level.

The FTC enforces free and fair competition and consumer protection laws at the federal level. Many of the individual states have adopted the Uniform Deceptive Trade Practices Act (“UDAP” statutes) which prohibit deceptive business practices involving unfair or fraudulent practices and untrue or misleading advertising.

In addition, federal agencies often rely on the cooperation and assistance of state agencies in investigating businesses and individuals for suspicious business or trade practices. As an important example, on September 29, 2020, the FTC along with 50 federal and state law enforcement partners announced a nationwide effort to protect consumers from abusive and illegal debt collection practices. The initiative, coined the Operation Corrupt Collector, has already led to the filing of at least two cases in federal courts and the freezing of defendants’ assets (Operation Corrupt Collector).

10. Hire an attorney experienced in FTC defense lawsuits and administrative proceedings to protect your business, capital, and reputation.

When in doubt about FTC compliance, current business practices, management policies, or internal control measures, etc., contact an experienced defense attorney as soon as possible, as the senior FTC defense attorneys at Oberheiden P.C. emphasize. FTC investigations and suits can lead to substantial monetary penalties, injunctions, cease and desist orders as well as endless reputational damage, impaired business contacts, and loss of customer base. Federal agencies such as the FTC remain especially eager to scrutinize businesses and individuals for unfair, deceptive, misleading, or fraudulent business practices that either injure consumers or threaten competition.

An attorney can guide your business through investigative process and, if it comes to it, defend your case in court or in an administrative proceeding. An FTC defense attorney will fight for your career, your business’ capital, and your reputation. Our healthcare fraud defense attorneys assist service providers and businesses under investigation for alleged Qui Tam Lawsuit, Stark Law, False Claims Act, or Anti-Kickback violations. Contact Oberheiden P.C. today.

Why Clients Trust Oberheiden P.C.

  • 95% Success Rate
  • 2,000+ Cases Won
  • Available Nights & Weekends
  • Experienced Trial Attorneys
  • Former Department of Justice Trial Attorneys
  • Former Federal Prosecutors, U.S. Attorney’s Office
  • Former Agents from FBI, OIG, DEA
  • Cases Handled in 48 States
Email Us 888-680-1745