On April 16, lawmakers reintroduced legislation to restore the Federal Trade Commission's authority to pursue monetary relief in federal court - a power the FTC lost in a 2021 Supreme Court ruling that significantly curtailed its ability to recover money for people and businesses harmed by scams, fraud, and deceptive practices.
The bill, led by Senator Maria Cantwell and co-sponsors in both chambers, would restore the FTC's Section 13(b) authority. Here's what that means in plain language, and why it matters if you run a small business.
What Section 13(b) Is and Why It Got Taken Away
The FTC has two main tools when it finds a company cheating people. It can issue orders (stop doing this), and it can seek to recover money from the wrongdoer to return to victims.
Section 13(b) of the FTC Act was the mechanism for the second part - going to federal court and asking a judge to order the company to pay back what it took. The FTC used this for decades to recover billions for consumers and small businesses victimized by telemarketing fraud, business opportunity scams, fake invoice schemes, and deceptive subscription traps.
In 2021, the Supreme Court ruled in AMG Capital Management v. FTC that Section 13(b) did not actually give the FTC the authority to seek monetary relief the way it had been using for years. That decision effectively removed billions of dollars in annual consumer restitution power from the agency overnight.
Since then, the FTC can still order companies to stop illegal behavior. But its ability to make victims whole financially has been severely limited.
What the New Bill Would Do
The legislation reintroduced this week would explicitly restore the FTC's Section 13(b) authority by clarifying the statute. If passed, the FTC could once again go to federal court to:
- Seek monetary restitution for consumers and small businesses harmed by fraud
- Force companies to disgorge profits from illegal schemes
- Provide injunctive relief blocking ongoing harmful practices
The Senate Commerce Committee's press release cited the need to "return billions to consumers ripped off by scams, fraud, and unfair practices" - and while the consumer framing is dominant, small businesses are also frequently victims of exactly the conduct the FTC targets.
Why Small Businesses Should Be Paying Attention
The FTC's enforcement targets aren't just about consumer products. Small businesses get harmed by:
Fake invoice and directory scams - Companies send invoices for services never ordered - fake advertising listings, domain renewals, office supply deliveries. Many small businesses pay them because sorting through vendor invoices is time-consuming. The FTC has brought cases against companies running these schemes for decades.
Business opportunity and franchise fraud - Sellers of "turnkey business systems," vending machine routes, or work-from-home schemes targeting small business aspirants. The FTC's crackdown in this space was more effective when it could recover money.
Deceptive vendor marketing - This includes misleading claims about software performance, subscription traps in B2B SaaS, and AI tools that promise capabilities they don't have. As AI vendor adoption grows among small businesses, this category of harm is expanding.
Fake review manipulation - The FTC's 2024 rule banning fake reviews gave the agency authority to go after companies buying or fabricating reviews. The ability to pursue monetary penalties makes that rule enforceable.
Without Section 13(b) restoration, the FTC can tell companies to stop. With it, the FTC can also make sure victims don't have to just absorb the loss.
What's the Likelihood This Passes?
Restoring Section 13(b) has bipartisan support in concept - both parties publicly oppose fraud - but the bill has been introduced before without reaching a floor vote. The 2021 Supreme Court ruling created immediate urgency in 2021-2022, and it did not pass then.
The current political environment is more deregulation-focused than previous years, which creates headwinds. But fraud enforcement, particularly against the type of scams that target small businesses and retirees, tends to attract broader support than general regulatory expansion.
This is a "watch this space" story rather than a "done deal." The bill's reintroduction signals that there's still appetite in Congress to address the gap. Whether that appetite is strong enough to move it through committee and to a vote in 2026 is a different question.
What You Can Do Now
While the legislative debate continues, small businesses can protect themselves through channels that don't depend on FTC restoration:
Report fraud when it happens. File reports at reportfraud.ftc.gov. FTC case selection is partly data-driven. More reports on a specific scheme increase the likelihood of an investigation, even if the agency can't currently recover money for you.
Know the scam patterns. The FTC Business Blog (business.ftc.gov/blog) publishes plain-language alerts about active fraud targeting small businesses. It's worth bookmarking and checking monthly.
Document everything. If you're ever defrauded by a vendor or scheme, preserve the communications, invoices, and bank records. The passage of any restoration legislation wouldn't be retroactive, but documentation would be essential if similar legislation creates a path to recovery in the future.
Sources: Senate Commerce Committee press release on FTC Section 13(b) legislation reintroduction, April 16, 2026 (commerce.senate.gov); FTC Business Blog (business.ftc.gov/blog); AMG Capital Management v. FTC Supreme Court decision (2021)
Sam Torres covers government and regulatory news for The Useful Daily. Published at theusefuldaily.com.