Communication is key with respect to the compulsory process, said Colin Hector, an attorney at the Federal Trade Commission (FTC), during a panel at the Auto Finance Risk & Compliance Summit last month.
When the FTC was created in 1914, its purpose was to prevent unfair methods of competition in commerce as part of the battle to “bust the trusts,” according to its website. Over the years, Congress passed additional laws giving the agency greater authority to police anticompetitive practices. For example, the FTC may issue a civil investigative demand (CID) to an organization that involves unfair or deceptive acts or practices; prefilling is an investigation conducted before filing a charge.
“There are two main types of subpoenas we will send out [for] prefilling,” Hector said. “Some may go [to] the target of the investigation or seek information directly from that entity or individual. And then we will send out a CID as well to third-parties, service parties, service providers or other entities that have a business relationship with the target.”
Whichever type of CID a company has received, it is important that the company communicates with FTC in the first place, Hector said. There are two reasons for this: One is that FTC needs to know the “nuts and bolts” of the information so that the FTC can make a better judgement. The second reason is that FTC genuinely understands that much of what it received was “imperfect information,” Hector added.
“You may need to educate me on what information materials you have and how they are organized,” he said. “It is much easier for us to come up with alternatives and compromises so that we are able to get the information we need without imposing an undue burden on your company.”
Hear more about FTC compliance from the Auto Finance Risk & Compliance Summit in the video below: