FTC Investigations and Enforcement Defense

An FTC matter may begin with an informal inquiry, a Civil Investigative Demand, or a lawsuit filed without advance notice. The agency may examine advertising, recurring billing, cancellation and refund practices, telemarketing, data use, or payment processing. The investigation can expand to affiliated companies, owners and officers, merchant accounts, transaction and settlement records, and bank records.

Rome LLP represents businesses, owners, and officers in FTC investigations and enforcement actions, including matters involving merchant accounts and payment processing. The firm handles CIDs, emergency relief, asset freezes, receiverships, settlement negotiations, final-order compliance, and related state attorney general inquiries.

The firm has represented businesses and individual defendants in FTC enforcement actions involving ex parte asset freezes, receiverships, and stipulated orders for permanent injunction and monetary judgment.

The firm also reviews customer billing practices before they lead to chargebacks or scrutiny by card brands and regulators.

FTC Investigations and Civil Investigative Demands

A Civil Investigative Demand may require documents, written responses, testimony, or a combination. The recipient may be the subject of the investigation or a third party with relevant information.

A recipient should retain counsel promptly. Counsel can address preservation, negotiate the scope and timing of the response, and prepare written answers or testimony. Before documents are produced or testimony is given, counsel should identify material gaps or inconsistencies in the available records and determine how they affect the company’s response.

An investigation may close without further action, lead to a negotiated resolution, or result in an enforcement action.

Enforcement Actions, Asset Freezes, and Receiverships

The available relief depends on the authority invoked. The FTC may seek injunctive relief and, where authorized, civil penalties or consumer redress. It may also seek enforcement of an existing order.

Some cases begin under seal with a request for emergency relief. A temporary restraining order may freeze assets, restrict business operations, authorize expedited discovery, and appoint a receiver with authority to obtain access to business records, systems, and accounts before the defendants receive notice.

Once the order is served, immediate disputes may concern access to operating funds, the receiver’s authority, and demands for records or information. At the preliminary-injunction hearing, defendants may challenge continued emergency relief.

Merchant Accounts and Payment Records

FTC investigations involving merchant activity often turn on how the account was opened, how transactions were submitted, where the proceeds were settled, and who controlled the account and funds. The account record is often fragmented. The merchant may hold customer and order data, while the application, transaction data, settlement records, and reserve information are maintained elsewhere in the payment chain.

Rome LLP addresses those issues as part of the FTC defense and, when necessary, handles related payment disputes over withheld settlements, reserves, account restrictions, or access to records.

Settlement and Order Compliance

An FTC resolution may be embodied in an administrative consent order or a stipulated order for permanent injunction and other relief entered by a federal court. Depending on the case, the order may prohibit particular products or business practices, restrict recurring billing or payment activity, and include monetary relief or civil penalties where authorized.

Final orders often govern the business for years. They may require the order to be distributed within the company, signed acknowledgments, sworn compliance reports, prompt notice of changes in ownership or business activities, and records sufficient to demonstrate compliance. The order may also permit the FTC to demand additional reports, documents, or testimony.

A monetary judgment may be partially suspended based on the defendants’ financial disclosures. A material omission or misstatement can cause the suspended balance to become due.

Rome LLP evaluates proposed final-order terms for their effect on the client’s future operations, payment relationships, reporting obligations, and ability to comply.