The FTC has filed a lawsuit in an Atlanta federal district court against a company that markets fuel cards to operators of vehicle fleets in which the FTC alleges that the company violated the FTC Act’s prohibitions on unfair and deceptive acts and practices.  The company’s CEO was also named as a defendant.

In its complaint, the FTC describes the fuel cards as “charge cards that customers can distribute to vehicle drivers to purchase fuel and other transportation-related products and services.”  The unfair and deceptive acts and practices in which the company is alleged to have engaged include:

  • Not posting customer payments when they were received, thereby leading to additional fees such as late fees for on-time payments and “high credit risk” fees because the customers ostensibly had paid late.
  • Not stopping unauthorized charges as promised, such that despite advertising the cards as “fuel only” cards, cardholders were able to purchase any item sold at fueling locations, including beer and snacks.
  • Not providing advertised per-gallon savings to card users.
  • Charging fees for set-up, transactions, and membership despite having made representations that the company does not charge such fees.
  • Charging recurring fees for programs without customer authorization.

The complaint seeks injunctive relief and consumer redress, including restitution, refunds and disgorgement.  There is currently a circuit split as to whether the FTC has authority to seek restitution under Section 13(b) of the FTC Act.  The FTC has filed a petition for a writ of certiorari in FTC v. Credit Bureau Center, LLC, in which the Seventh Circuit held that the FTC does not have authority to seek restitution under Section 13(b) because its plain terms provide solely for injunctive relief.  (The FTC’s petition includes a footnote stating that “[t]he Commission rarely exercises its authority to represent itself before this Court [but] takes this step now not only because the decision of the court of appeals is at odds with the holdings of seven other circuits and this Court’s precedent, but also because of the extraordinary importance of the issue presented.”)  A petition for a writ of certiorari was also filed by the defendant in FTC v. AMG Capital Mgmt., in which a Ninth Circuit panel affirmed a $1.27 billion FTC disgorgement award.  In its certiorari petition in Credit Bureau Center, the FTC asks the Supreme Court to grant its petition and hold AMG pending resolution of Credit Bureau Center.

Last month, the Supreme Court granted certiorari in Liu v. SEC in which the question presented is whether the Securities and Exchange Commission can obtain disgorgement as an equitable remedy in an enforcement action.  Observers have suggested that a ruling in Liu that the SEC cannot obtain disgorgement as equitable relief would have consequences for the FTC and its ability to obtain disgorgement under the FTC Act.  In its certiorari petition, the FTC argues that the Supreme Court should grant its petition notwithstanding the grant of certiorari in Liu because “[t]he question here is distinct from the question in Liu, will not be resolved in that case, and warrants independent review.”