FTC Expands Its Technology Investigations Office to Protect Consumers

The agency is building up its technology investigations unit to bolster its consumer protections programs as new technologies create new risks for consumer fraud.

FTC, consumer fraud, consumer protection

The U.S. Federal Trade Commission has announced the creation of a new investigative unit that aims to better protect consumers from new kinds of consumer fraud that bubble up constantly in connection with new technologies and services.

The new Office of Technology Research and Investigation (OTRI), which has been created in the FTC's Bureau of Consumer Protection, will replace and build upon an existing Mobile Technology Unit that previously worked to fight deceptive and unfair business practices against consumers, according to a March 23 post on the FTC's blog.

The new department is being created "to expand the FTC's capacity to protect consumers in an age of rapid technological innovation," the agency stated.

For the last several years, staff members in the Mobile Technology Unit worked with the agency's Bureau of Consumer Protection, FTC regional staffers and law-enforcement investigations to develop consumer protection policies, such as The Kids App Privacy Reports, the Mobile Shopping Report, and the Healthcare App Snapshot presented at the Consumer Generated and Controlled Health Data workshop, according to the post.

The new OTRI will continue the work of the Mobile Technology Unit, but will take on an even broader mandate and gain a larger staff to better fight such crimes, the post continued. The OTRI's responsibilities will include research, investigative techniques and providing insights to the agency on technology issues involving all facets of the FTC's consumer protection mission, according to the agency. That includes issues such as privacy, data security, connected cars, smart homes, algorithmic transparency, emerging payment methods, big data and the Internet of things.

The FTC is also waging a recruitment effort to seek more technology specialists to work in the new OTRI office and help expand its programs, according to a related March 23 blog post. The new positions include a two-year Technology Policy Fellowship program, a research coordinator and a technical internship program.

The FTC was created 100 years ago when cutting-edge technologies at that time included such things as motion pictures and the onset of radio, according to another related March 23 FTC blog post by Ashkan Soltani, the FTC's chief technologist. "The FTC has always been at the forefront of consumer protection issues centered around the 'new' technology of the era," wrote Soltani.

The appearance of smartphones is what caused the agency to create its original Mobile Technology Unit several years ago, he wrote. The idea at the time was to battle consumer protection challenges posed by mobile technologies and develop tools and techniques to help protect consumers who were engaged in mobile commerce, he wrote.

The OTRI's new fellowships will bring in recent graduates who will provide technical expertise to FTC attorneys and investigators, identify and design relevant research projects in the area of consumer technology, and ultimately develop new methods of consumer protection research, wrote Soltani.

The new research coordinator will oversee the OTRI's technology research projects, including project design and execution, as well as help translate the findings so they may be used to create new policy and direction for the agency.

The FTC did not immediately respond to a request by eWEEK for further comments about the creation of the new agency department.

The FTC is often involved in consumer protection efforts involving technology. In December 2014, the FTC announced that T-Mobile USA will have to pay at least $90 million in refunds, fines and penalties to consumers and state and federal government agencies for "cramming" customer phone bills with unauthorized charges for years and then ignoring complaints and requests for refunds, according to an earlier eWEEK report. In a 16-page consent decree with the FCC and FTC, T-Mobile agreed to pay at least $67.5 million in direct refunds to consumers who file claims for phone bill charges that they did not authorize, as well as $18 million in fines to the 50 states and the District of Columbia, as well as a $4.5 million fine to the U.S. government.

The fines against T-Mobile came two months after a similar case by the agencies against AT&T Mobility, when that phone carrier was fined $105 million in October for cramming the bills of its own customers.

In the AT&T case, the fine came after investigations by the FCC and the FTC found that AT&T had illegally crammed customer cell phone bills with extra, unauthorized charges and then refused to adequately remove the charges when users complained. The $105 million fine included $80 million for direct refunds to customers as well as $25 million in penalties to be paid to the FCC, FTC and attorneys general across the United States. It still stands as the largest fine in the history of the FCC so far, according to the agency.