FDA agrees to enforce menu labeling rule in May 2018 – National Consumers League

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September 27, 2017

CSPI and National Consumers League Put Litigation on Hold After Reaching Agreement with Federal Government

Media contact: Jeff Cronin, CSPI: 202-777-8370; Cindy Hoang, NCL: 202-207-2832; Peter Lehner, Earthjustice: 212-845-7389

Washington, DC—U.S. District Court Judge Emmet Sullivan today approved an agreement that paves the way for the Food and Drug Administration to begin enforcing regulations requiring chain restaurants, grocery stores, and convenience stores to include calorie counts on menus in May 2018. The Center for Science in the Public Interest and the National Consumers League sued the FDA in June after the agency abandoned an earlier enforcement deadline only one day before enforcement was due to begin. The nonprofit law firm Earthjustice, which represents CSPI and NCL, and the Department of Justice agreed to stay further proceedings in that lawsuit following an August 25th statement from FDA Commissioner Scott Gottlieb providing assurance that there will be no further delay and no changes to the menu labeling requirements.

Longtime advocates for menu labeling say that the agreement gives much needed clarity both to consumers, who overwhelmingly want and use calorie and other nutrition information, and to companies, many of which are already making calorie counts available to the public on their menus or websites.

“Since Americans are getting more food outside the home than ever before, having access to calorie information at chain restaurants is important for consumers who want to maintain a healthy weight and reduce their risk of diet-related disease,” said CSPI vice president for nutrition Margo G. Wootan. Wootan was recently named by Eating Well magazine as one of the 2017 American Food Heroes for her work on menu labeling. 

“Congress passed a law requiring menu labeling more than seven long years ago, and the FDA finalized its regulations almost three years ago,” said Sally Greenberg, executive director of the National Consumers League. “Responsible companies have already invested in compliance. As frustrating as this process has been, we’re glad that the end of the long campaign for menu labeling is now in sight.”

The FDA finalized the menu labeling rule in 2014, with compliance and enforcement due to begin before the end of 2015. The agency subsequently delayed enforcement until May 2017 and then, in the challenged rule, until May 2018. Today’s agreement provides that the lawsuit challenging the delay will proceed only if the FDA announces an additional delay of enforcement or fails to issue guidance to industry by the end of 2017. The guidance will clarify the menu labeling rule and aid implementation—but cannot weaken the rule’s requirements.

“Americans want and deserve to know what they’re eating,” said Earthjustice senior attorney Peter Lehner. “So it is good news that the FDA has affirmed its commitment to ensuring that chain restaurants, supermarkets, convenience stores, movie theaters, and similar food retail establishments provide calorie and other nutrition information to customers.”  

Calorie labeling at restaurants isn’t entirely out of the woods, proponents caution. A bill pending in Congress, the so-called Common Sense Nutrition Disclosure Act, would undermine the Administration’s implementation of menu labeling by exempting take-out chains, including pizza restaurants, and others from some of the requirements, and by letting retailers use arbitrary serving sizes to mask total calorie content. The bill would also let supermarkets that sell restaurant-type food hide calorie information in less-visible locations. 

“Most of the biggest chain restaurants are already providing calories on menus and menu boards,” Wootan said. “We hope Congress resists the efforts of outlier companies, notably Domino’s and other pizza chains, to weaken menu labeling.” 

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The Center for Science in the Public Interest is a nonprofit health-advocacy group based in Washington, DC, that focuses on nutrition and food safety.  CSPI is supported largely by subscribers to its Nutrition Action Healthletter and by foundation grants.
 
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.

Earthjustice is the premier nonprofit environmental law organization. We wield the power of law and the strength of partnership to protect people’s health, to preserve magnificent places and wildlife, to advance clean energy, and to combat climate change. We are here because the earth needs a good lawyer.

The poultry industry wants to speed up production – but at what cost? – National Consumers League

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poultry_production-crop.jpgBeef consumption in the U.S is on the decline. The red meat that once played a central role in the American diet is disappearing off of consumers’ plates by the rate of about 20 pounds of beef per person, per year. Increased awareness of obesity and other weight-related diseases linked to red meat, and a public health push to persuade Americans to choose leaner options are likely some of the causes of this drop in demand. As beef consumption has decreased, poultry has steadily risen to become the most popular meat product in the U.S., and the poultry industry isn’t showing any signs of slowing down.

Earlier this month, the National Chicken Council (NCC) submitted a petition to the Food Safety and Inspection Service (FSIS)–the food safety regulatory arm of USDA–requesting a lift on a 2014 Obama Administration rule that limits processing speeds to 140 birds per minute. In their petition, the NCC requests that FSIS initiate a waiver program allowing chicken slaughter establishments “to operate without the arbitrary line speed limitations.” This means processing speeds would likely increase to at least 175 birds per minute. The NCC argues that limiting processing rates is putting the U.S. chicken industry at a competitive disadvantage, as some countries are able to process over 200 birds per minute.

Despite their argument, it’s hard to feel sorry for the NCC when the U.S. is currently the world’s top producer of poultry meat. In fact, this year consumers are expected to consume a record amount of chicken, about 91.3 pounds per person. Not only is poultry production dominating nationally, but according to the USDA, the U.S. is also the second largest exporter of poultry meat in the world.

Since the NCC’s petition became public, animal rights groups, workers unions, and consumer advocacy groups (including NCL) have spoken up about the increased safety risks associated with faster processing. Removing speed line limits makes birds susceptible to harsher slaughtering conditions, including violent removal of limbs, drowning, scalding, and other egregious abuse. On top of inhumane slaughtering practices, the poultry industry is notorious for the poor treatment of their workers. Without processing rules, poultry workers are even more vulnerable. According to the director of Oxfam America’s U.S. Domestic Program, Minor Sinclair, “Bumping up the poultry processing line speed to 175 birds per minute – or striking 3 birds per second – will only invite more worker amputations, hospitalizations, and injuries – not to mention increasing the risk of meat contamination.”

The National Consumers League advocates for the health and safety of workers and consumers. We stand with the other consumer and worker rights organizations objecting a lift on speed line limits. The health and safety of workers and consumers is far more important than any potential economic gain for the poultry industry. Consumers should remain informed about the changes happening in food processing, and speak out against policies that put workers and public health at risk. There is already so much progress to be made in the poultry industry. If NCC’s petition is accepted, it will become even more difficult for the poultry industry to meet the needs of workers and consumers whose best interest they claim to serve.   

LifeSmarts enlists high school students as OTC medicine safety mentors – National Consumers League

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hertzberg-1.jpgThis blog was originally published on LifeSmarts.org.

We are excited to launch a new community service project today: the LifeSmarts OTC Medicine Safety Mentoring Project, which provides materials and curriculum that are bolstered by educational resources produced by Scholastic.

Studies have found that children as young as 10 and 11 begin self-administering OTC medicines. Our new outreach effort equips high school students with tools they can use to mentor younger children to be safe in their use and storage of OTC medicines.

  • High School focus: Classroom lessons, study materials for the 2017-18 competition, and resources to prepare high school students to educate 5th and 6th graders.
  • Middle School focus: Materials designed to be used with 5th and 6th graders and taught by LifeSmarts high school student mentors.
  • Community focus: Community-engagement activities offer fun, fast ways to engage with parents, children, and the community at large.

The LifeSmarts OTC Medicine Safety Mentoring Project represents strong partnerships, which drive everything we do here at LifeSmarts. We are gratified to work with dedicated educators seeking current consumer lessons for the classroom, competitive coaches looking for every advantage in preparing their teams for online and live competition, and enthusiastic student participants with a strong sense of community involvement. We are also gratified to have the support and encouragement of our funding partner, McNeil Consumer Healthcare.

We know LifeSmarts gives students the skills they need to succeed as adults, and we know students are eager to apply what they learn at home and in their communities. We have seen LifeSmarts students embrace the Safety Smart project, conduct food waste audits with gusto, and produce creative PSAs to educate their peers. We are excited to present students and coaches with this community outreach effort and see where they will take it!

As LifeSmarts celebrates “The Year of Health and Safety” in 2017-18 we will continue to give special focus throughout the year to health and safety lessons, learning activities, special projects, and new opportunities.

LifeSmarts announces ‘Year of Health and Safety’ for national consumer education / scholarship program – National Consumers League

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September 26, 2017

Contact: NCL Communications, Cindy Hoang, (202) 207-2832, cindyh@nclnet.org

Washington, DC–The 24th season of LifeSmarts, a national scholarship competition and educational program coordinated by the National Consumers League (NCL), kicked off earlier this month at LifeSmarts.org, where students learn about real-life consumer issues and compete to win prizes and scholarships. Today, NCL announced that the 2017-2018 LifeSmarts program year will be the “Year of Health and Safety,” with special emphasis on health-related curriculum and competitive opportunities, underwritten by a grant from McNeil Consumer Healthcare.

Today LifeSmarts is unveiling a new community service opportunity for high school students – the LifeSmarts OTC Medicine Safety Mentoring Project. LifeSmarts provides materials and curriculum, bolstered by educational resources produced by Scholastic, to enlist high school students to become mentors for middle school students to help them understand the wise use and safe storage of over-the-counter medicines.

“We are so excited to declare 2017-18 the ‘Year of Health and Safety,’” said national Program Director Lisa Hertzberg. “We know LifeSmarts gives students the skills they need to succeed as adults, and we see students applying what they learn immediately at home and in their communities. We are thrilled to be able to give special focus to this year on health and safety lessons and look forward to rolling out new resources for teachers and opportunities for student participants.”

Besides health and safety, LifeSmarts focuses on four other main content areas: consumer rights and responsibilities, personal finance, technology, and the environment. Students are quizzed on their knowledge of these subject areas during online competition. Top-performing teams then advance to statewide competitions, and state champion teams advance to the national championship held each year in a different American city. The 2018 National LifeSmarts Championship will take place April 21-24 in San Diego. Winning teams receive scholarships and other prizes.

Last year, students answered more than 3.5 million consumer questions about credit reports, recycling, nutrition, social media, state lemon laws, and everything in between. More than 100,000 students are expected to participate in the program in the 2017-18 season. LifeSmarts is active in all states and the District of Columbia, where NCL is headquartered.

“We are excited to have the opportunity to focus on health and safety for consumers at this age, when they are beginning to make decisions for themselves and influencing decisions made by their parents,” said Sally Greenberg, executive director of NCL. “Too often, traditional high school curriculum fails to teach students vital information to become successful adults, and LifeSmarts helps to close that gap.” 

“Johnson & Johnson Consumer Inc. is proud to be a long-standing supporter of the LifeSmarts program and thrilled about the OTC Medicine Safety Mentoring project. As a manufacturer of over-the-counter medicines, Johnson & Johnson Consumer Inc. believes that the LifeSmarts OTC Medicine Safety Mentoring Project can help instill a healthy respect for all medicines in adolescents by teaching core concepts on the responsible use and safe storage of medicines. In doing so, we are building a healthier future for our adolescents, and helping to prevent medicine misuse, errors, and adverse events,” said Ed Kuffner M.D., Chief Medical Officer, Johnson & Johnson Consumer.

In addition to hosting the official LifeSmarts competition, LifeSmarts.org provides resources for teachers to supplement existing lesson plans. These include daily quizzes, educational videos, social media competitions, focused study guides, and scholarship opportunities. LifeSmarts lessons closely align with courses taught in family and consumer sciences, business, technology, health, and vocational education.

Visit LifeSmarts.org for more information.

LifeSmarts: Learn it. Live it.

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About LifeSmarts

LifeSmarts is a program of the National Consumers League. State coordinators run the programs on a volunteer basis. For more information, visit: LifeSmarts.org, email lifesmarts@nclnet.org, or call the National Consumers League’s communications department at 202-835-3323.

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL urges the Senate to reject the Graham-Cassidy bill – National Consumers League

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September 25, 2017

Contact: Cindy Hoang, (202) 207-2832, cindyh@nclnet.org

Washington, DC—The National Consumers League (NCL), which has been working to support health care for all Americans since our founding in 1899, is strongly opposed to the Graham-Cassidy bill to repeal and replace the Affordable Care Act (ACA). Like previous repeal bills rejected by the Senate, this proposed legislation will take health coverage away from an estimated 32 million Americans and decimate our health care system as we know it.

Graham-Cassidy is even more harmful than previous ACA repeal and replace bills. Provisions of the bill include the elimination of cost-sharing reductions that help low-income Americans pay for their coverage, and waivers of key consumer safeguards such as the essential health benefits, minimum coverage requirements, and the non-discrimination clause protecting Americans with pre-existing conditions.

Perhaps most egregious are the massive cuts to Medicaid, which covers 70 million Americans. Medicaid expansion is abruptly nixed, leaving millions of vulnerable patients and consumers without coverage. The shift to a per-capita cap will undoubtedly burden states with a huge financial liability, forcing them to choose between raising taxes to meet funding needs, cutting funding from critical programs such as infrastructure or education, or imposing devastating cuts to Medicaid eligibility, benefits, and coverage for millions. 

The Graham-Cassidy bill also represents yet another attempt to railroad legislation through Congress, absent bipartisanship and public discourse. A bill that would fundamentally change our health care system and affect one-sixth of our economy deserves transparency, and more than a few weeks of debate. NCL agrees with Senator John McCain’s opposition to the bill and his acknowledgment that “we could do better working together, Republicans and Democrats, and have not yet really tried.”  Truer words were never spoken. 

NCL joins with Senator McCain in urging the Senate to reject the Graham-Cassidy bill and instead explore bipartisan solutions to strengthen our healthcare system, and particularly support the constructive and bipartisan dialogue led by Chairman Lamar Alexander and Ranking Member Patty Murray in the Senate Health, Education, Labor, and Pensions Committee aimed at stabilizing the insurance market. We will continue to stand alongside our colleagues in the public health and patient advocacy communities to protect access to quality and affordable health care for every American.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

 

NCL encouraged by FDA Commissioner Gottlieb’s comments on Alzheimer’s Disease guidance development – National Consumers League

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In August 2017, the National Consumers League, WomenAgainstAlzheimer’s, AARP, National Association of Nurse Practitioners in Women’s Health, and several other women’s health advocacy organizations met with Dr. Janet Woodcock, FDA’s Director of the Center for Drug Evaluation and Research (CDER), to discuss treatments for Alzheimer’s Disease (AD). 

 

We requested this meeting because of concerns about Alzheimer’s disproportionately affecting women, with two-thirds of the patients diagnosed and the vast majority of caregivers being female, and the unfortunate fact that no new treatments for this terrible disease have been developed and approved in the past 15 years.   

The group discussed the need for updating the agency’s Guidance on AD, and Dr. Woodcock indicated that this Guidance would be a good candidate for review. We were pleased that FDA Commissioner Scott Gottlieb, speaking at the September 13, 2017 Blueprint for Breakthroughs meeting sponsored by Friends of Cancer Research (FOCR) and Alexandria Real Estate Equities, confirmed the agency’s intent to revise the Guidance on AD.   

As reported in The Pink Sheet, the FDA Commissioner made the following observations at the FOCR meeting: 

  • We don’t have as many disease-specific guidelines as you would expect on the new drug side.
  • The FDA is planning a revised guidance on Alzheimer’s drug development, part of a broader reform of the Office of New Drugs (OND).
  • The OND development is being spearheaded by Center for Drug Evaluation and Research Director Dr. Janet Woodcock.  As Acting Director of OND, Dr. Woodcock is moving to implement policy and structural changes for OND, including re-evaluating the division-by-division staffing model to determine whether staff can be trained to move between review divisions as needs arise.  Dr. Woodcock has cited the need for more policy development, including guidance documents, to ensure that product sponsors receive the most up-to-date advice.
  • As part of the OND revamp, Gottlieb said, “we want to develop more time for reviewers to work on specific guidance documents that will help address certain aspects of the review process where we think that the science has evolved to a point where we want to create more modern standards.” 
  • The disease-specific guidance writing effort is an attempt to go back and look at diseases where there hasn’t been a lot of innovation in different aspects of clinical development, where the FDA  hasn’t articulated principles, with the forthcoming documents addressing issues such as use of different trial designs and endpoints. 
  • The guidance-writing initiative is intended to articulate modern evidentiary and clinical trial design expectations in specific disease areas where the science has evolved. 
  • The goal, Gottlieb said, is to “create more incentives for people to try to attack these unmet medical needs because we have clear direction that they can shoot against.”
  • Gottlieb explained: The new Alzheimer’s guidance will “look at some of the new modalities and points that could become maybe not a primary endpoint, but perhaps secondary and tertiary endpoints, or how you look at cognitive function versus performance as different endpoints. Those are now dual endpoints in a lot of clinical studies.”  With the guidance writing effort, “there’s going to be some things that we’re going to update because the science has changed.  In most cases, we’re doing these things anyway now in terms of how we’re thinking about these different therapeutic areas, but we just haven’t had the opportunity to articulate the standards in guidance, and that’s what this exercise is for.”

Our coalition is very appreciative of Dr. Woodcock’s time and accessibility for discussion of these issues. Her leadership is renowned. We also appreciate FDA Commissioner Gottlieb’s commitment to developing Guidances to ensure more clarity and direction as the medical and scientific community works to develop safe, effective, and affordable treatments for diseases like Alzheimer’s and so many others.

GAO airline fee report shines light on fleecing of passengers, rebuts industry claims – National Consumers League

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September 22, 2017

Contact: John Breyault, NCL, (202) 207-2819, johnb@nclnet.org or Cindy Hoang, (202) 207-2832, cindyh@nclnet.org

Washington, DC—New government data flies in the face of airline industry claims that it’s never been a better time to fly, said the National Consumers League (NCL) today. The report, released by the U.S. Government Accountability Office (GAO) examined the rapid growth in nickel-and-diming by the airline industry, which has piled billions of dollars of fees on the backs of the flying public.

“The GAO report reflects many of the concerns that consumer groups like NCL have expressed about how the airlines are increasingly fleecing passengers via so-called ‘ancillary fees.’” said NCL Executive Director Sally Greenberg. “This new data contradicts the industry myth that ancillary fees make flying cheaper. The report exposes the truth about these fees — that their explosive growth has created a massive profit center for the airlines.”

Highlights from the report include:

  • The growth of ancillary fees has created a giant tax break for airlines, depriving airports of much-needed revenue needed for maintenance and upgrades. For example, the GAO estimated that in 2016 the government lost out on $309 million in tax revenue thanks to baggage fees being exempted from taxation.

  • Airlines’ fee revenues increased in every reported category. From just two fee categories — baggage fees and change/cancellation fees — the airlines collected $7.1 billion 2016 alone, an increase of 13 percent since 2010.

  • Contrary to industry claims that fees help airlines provide a lower-cost service to the flying public, the GAO found that consumers who pay to check a bag pay more in total to fly than they did when a checked bag was included as part of the fare.

  • The study also identified glaring differences in airlines’ a la carte systems, which could leave many consumers frustrated and confused. Different airlines are offering “preferred seats” options but are providing different amenities in their packages. This creates a scenario where a consumer could purchase a preferred seat expecting additional legroom as they have come to expect on another airline, only to receive a seat with minimal leg room.

“The nickel-and-diming of passengers by the airline industry is a huge pain point for consumers,” said John Breyault, NCL vice president of public policy, telecommunications and fraud. “Yet, the airlines want us to believe that these fees allow consumers to fly for less and that consumers don’t mind them. Those industry claims are mythology.”

To help even the playing field between passengers and airlines, the National Consumers League supports the FAIR Fees Act, sponsored by Senator Ed Markey (D-MA) and Senator Richard Blumenthal (D-CT). The legislation has received bipartisan support and is included in the Federal Aviation Administration’s reauthorization bill, which is pending in the U.S. Senate. The FAIR Fees Act would require that fees for baggage, ticket changes, cancellations, and other services be justified by cost to the airlines. NCL believes that this common-sense consumer protection bill would help return sanity to air travel, help end the airlines’ massive tax breaks, and increase competition between the Big Four airlines at a time that they are seeking even greater levels of control over the nation’s air traffic control system.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

 

NCL: Congress should move to address outrageous Equifax conduct in wake of breach – National Consumers League

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September 19, 2017

Contact: John Breyault, NCL, (202) 207-2819, johnb@nclnet.org or Cindy Hoang, (202) 207-2832, cindyh@nclnet.org

Washington, DC – The National Consumers League (NCL), America’s pioneering consumer and worker advocacy organization, is calling on Congress, in the strongest possible terms, to hold data brokers responsible for the massive increase in consumers’ data security risk stemming from the breach of 143 million records at Equifax. Since the revelation of the breach earlier this month, it has been reported that Equifax failed to heed warnings about well-known security vulnerabilities in critical systems.

“Equifax was made aware of this exploitable vulnerability, given a patch to prevent it, and then sat on its hands for weeks without action,” said Sally Greenberg, NCL executive director. “What is to prevent any company that collects our most private data from exposing millions of consumers to theft if there are few serious consequences? Where are the incentives to protect our data? That is what is lacking today and why we see breach after breach.”

“Congress needs to act. We need a federal law that holds companies accountable for keeping our information safe. And there must be dire consequences when they fail to do so through sheer negligence,” Greenberg said. “Such consequences should include automatic repayment for damages, regulation of the data brokers, and potentially even criminal liability.”

NCL is calling on Congress to act; we support those consumer champions in Congress who have introduced legislation that would begin to address consumers’ vulnerability to breaches. These include:

  • Freedom From Equifax Exploitation (FREE) Act – NCL applauds Senator Schatz (D-HI) and Senator Warren (D-MA) for introducing legislation that will help consumers reduce their risks of identity fraud. The bill creates a uniform federal process for obtaining and lifting a credit freeze for free. In addition, consumers can receive one additional free credit report and get a refund for any fee credit reporting agencies levied against them when they froze their credit to prevent identity theft.

  • Data Broker Accountability and Transparency Act of 2017 – This common-sense privacy and security legislation, introduced by Senators Blumenthal, Franken, Markey, and Whitehouse, would allow consumers to monitor brokers’ collection of personal data for any inaccuracies in a free and easy-to-use way through a centralized website. The bill also requires data brokers like Equifax to develop and maintain robust privacy and data security programs and provide prompt notice in the event of breaches.

While NCL supports these bills, we await passage of a long-awaited national data security standard, which includes data breach notification requirements modeled after strong state laws in places like Illinois and California. As massive data breaches like Equifax’s become more common, exposing hundreds of millions of consumers to identify theft and other fraud, the need for this legislation will only become more critical. It is long past time for Congress to take action.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL blasts house vote to embolden pyramid schemes – National Consumers League

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September 14, 2017

Contact: John Breyault, NCL, (202) 207-2819, johnb@nclnet.org or Cindy Hoang, (202) 207-2832, cindyh@nclnet.org

Washington, DC—The National Consumers League (NCL) is deeply disappointed at the inclusion of language in an appropriations bill approved today by the U.S. House of Representatives that will enable pyramid schemes to proliferate, putting millions of consumers at increased risk of financial harm.

The amendment, sponsored by Congressman John Moolenaar (R-MI), purports to create a federal definition of pyramid schemes and protect consumers. In fact, the language is a thinly-veiled attack on the Federal Trade Commission’s ability to protect consumers from fraudulent direct selling business opportunities. Disregarding vocal opposition from consumer and Latino advocacy groups, pyramid scheme experts, FTC Commissioner Terrell McSweeny, former senior FTC officials, and members of the direct selling industry itself, the House has voted to enable pyramidal business practices that the FTC and the courts have consistently found to be illegal.

“This amendment, inserted into must-pass legislation in the dead of night at the behest of some the nation’s largest direct selling companies, will make millions of consumers more vulnerable to pyramid schemes,” said NCL Executive Director Sally Greenberg. “It is incredibly important that the Senate recognizes the true, destructive nature of this amendment, ensures that such language does not make it into its appropriations bill, and works to delete it from any conference report that receives consideration.”

The Moolenaar amendment language, through definitional trickery and numerous carve-outs, weakens the core precedents that the FTC has relied on for decades to shut down fraudulent business opportunities and discipline an industry with a long history of pyramid scheme behavior.

The federal courts have consistently stated that the critical difference between a legitimate direct selling business and a pyramid scheme is that the revenue must come primarily from the sale of products and services to retail customers unaffiliated with the business opportunity. Unfortunately, the Moolenaar amendment will undermine this critical tenet prevent the FTC from prosecuting all but the most blatantly fraudulent pyramid schemes.

“Today’s vote is disappointing, but is not the end of the fight,” said John Breyault, NCL vice President, public policy, telecommunications, and fraud. “We will continue to expose the direct selling industry’s campaign to sneak this destructive bill through Congress and work with consumer champions in the Senate to protect consumers from fraudulent pyramid schemes.”

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Former senior FTC officials call on Congress to oppose pyramid scheme promotion bill – National Consumers League

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September 13, 2017

Contact: Cindy Hoang, National Consumers League, (202) 207-2832, cindyh@nclnet.org

Washington, DC—A bipartisan group of former senior Federal Trade Commission (FTC) officials have called on House leadership to oppose “pending legislation that would dramatically curtail the Commission’s authority to bring appropriate enforcement actions” against fraudulent pyramid schemes. In a letter to House Speaker Paul Ryan (R-WI) and House Minority Leader Nancy Pelosi (D-CA), the officials called on House leadership to support the removal of an amendment sponsored by Congressman Jon Moolenaar (R-MI) from must-pass appropriations legislation.

“Our concerns are shared by a broad coalition of consumer and Latino advocacy organizations, and even prominent members of the direct selling industry itself,” wrote the former senior officials. “We are concerned that the proposed legislation would create unnecessary uncertainty and result in impairing the ability of the FTC to protect consumers against deceptive schemes.”

The letter noted the FTC’s 40+ years of success in prosecuting fraudulent pyramid schemes that deceptively lure consumers into supposedly lucrative business opportunities, where the vast majority of members lose money in order to enrich schemers. The Moolenaar amendment, wrote the former senior officials “would unnecessarily create new opportunities for legal challenge to enforcement; even worse, the provisions could put practices now recognized as harmful and deceptive beyond the reach of the law.” 

“Despite claims to the contrary by some in the direct selling industry, this legislation would not provide helpful clarification as to legitimate direct selling business practices, or strengthen consumer protections against fraudulent pyramid schemes,” noted the former senior officials. “Instead, it would undermine the FTC’s ability to effectively police these deceptive practices, and we fear they would spread, harming millions of consumers, and putting direct sellers who are committed to honest business practices at a competitive disadvantage.”

Signatories of the letter include former Chairman Jon Leibowitz, former Commissioner Joshua Wright, and former Directors of the Bureau of Consumer Protection William MacLeod, Lydia Parnes, Jessica Rich, and David Vladeck.

Full text of letter available here.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.