Supreme Court rules that FTC cannot seek restitution on behalf of consumers

Imagine you buy a “miracle” supplement that promises to cure everything from brain fog to back taxes.
It doesn’t work (shocking, I know), and later the Federal Trade Commission (FTC) swoops in and sues the company for
deceptive advertising. Naturally, you assume that somewhere down the line, you’ll get a refund check in the mail.

For decades, that assumption was often correct. The FTC regularly went to federal court, shut down scams,
and got money back for consumers. But in 2021, the U.S. Supreme Court effectively said,
“About that whole money-back thing under this particular law? No, you can’t do that.”

In AMG Capital Management, LLC v. FTC, the Court unanimously ruled that
Section 13(b) of the FTC Act does not allow the agency to seek monetary relief like
restitution or disgorgement in federal court. For Science-Based Medicine readers who care about health fraud,
bogus cures, and quackery, this wasn’t just a dry technical decision it was a big blow to one of the most effective
tools the FTC had for getting victims’ money back.

What exactly did the Supreme Court decide?

The case started with Scott Tucker, a payday lending titan whose companies charged sky-high interest rates and
allegedly tricked borrowers with deceptive disclosures. The FTC sued, claiming the practices were unfair and deceptive
under Section 5(a) of the FTC Act, and asked the court for two main things:

• A permanent injunction to stop the illegal conduct.
• Monetary relief in the form of restitution and disgorgement of profits.

For years, courts had allowed the FTC to use Section 13(b) to get both kinds of relief.
The statute says the FTC may go to federal court to seek a “permanent injunction,” and judges had interpreted
that phrase broadly enough to include monetary remedies. That’s how the FTC secured a $1.27 billion judgment
against Tucker and his companies.

But the Supreme Court took a narrower view. Reading the text and structure of the FTC Act, the justices held that
Section 13(b) authorizes only injunctions orders to do or stop doing something not orders to pay money back to consumers.
If the FTC wants restitution, the Court said, it must use other sections of the law that explicitly authorize monetary remedies,
even if those routes are slower and more complicated.

The result: the Supreme Court gutted the FTC’s favorite shortcut for getting quick cash relief for consumers.

How the FTC used to get your money back

To understand why this decision matters, you need a quick tour of how the FTC historically operated.
For decades, the agency treated Section 13(b) as a kind of legal Swiss Army knife:

• Identify an unfair or deceptive practice (for example, a bogus cancer cure, deceptive weight-loss supplement, or fake “detox” program).
• Go straight to federal court under Section 13(b).
• Ask for an injunction to stop the conduct and for monetary relief restitution and disgorgement to return money to consumers.

This approach was fast and effective. The FTC recovered billions of dollars in refunds using Section 13(b),
spanning everything from debt-relief schemes to sham health insurance, dietary supplements, and quack cancer cures.
In many cases, Section 13(b) was the only realistic way to get money back to large numbers of victims before a scammer
moved assets overseas or disappeared.

For health-related fraud the core concern of Science-Based Medicine 13(b) was essential.
When companies marketed supplements as “proven” to treat serious illnesses or peddled homeopathic products
as if they were evidence-based medicine, the FTC could step in, shut them down, and try to put money back into
victims’ pockets.

Why did the Court say “no more”?

The Supreme Court’s reasoning was more about statutory interpretation than sympathy for scammers.
The justices looked closely at the text and structure of the FTC Act and asked:
if Congress wanted to give the FTC the power to demand money, why didn’t it say so clearly?

The text problem

Section 13(b) refers only to “permanent injunction.” It says nothing about restitution, disgorgement,
or refunds. By contrast, other sections of the FTC Act like Section 19 and Section 5(l)
explicitly mention monetary remedies, such as:

• Rescission or reformation of contracts.
• Refunds of money or return of property.
• Payment of damages or other monetary relief.

The Court essentially applied a “don’t hide elephants in mouseholes” rule:
if Congress wanted to authorize billions of dollars in monetary relief, it wouldn’t sneak that power into
a passing reference to “injunctions.”

The structure problem

The justices also looked at how the FTC Act is structured. Sections 5 and 19 set out a more elaborate process:

1. The FTC first brings an administrative case and obtains a cease-and-desist order.
2. If the company violates the order, or if the conduct violates a specific trade regulation rule, the FTC can then go to court and seek monetary relief.

If Section 13(b) also gave the FTC a direct path to money without those procedural steps, the Court reasoned,
the detailed framework in Sections 5 and 19 would be largely unnecessary. That redundancy made little sense,
so the justices concluded that 13(b) was meant for stopping ongoing or imminent misconduct,
not for retrospective money judgments.

Science-Based Medicine’s angle: A win for scammers, a loss for consumers

From a science-based, consumer-protection perspective, the ruling landed with a thud.
As Science-Based Medicine noted when discussing the decision, the Court didn’t just tweak a minor procedural rule
it “greatly diminished” the government’s ability to obtain financial redress for victims of quacks and frauds.

Consider some of the areas where the FTC has historically taken action:

• Fake cancer cures promising miraculous results with no credible evidence.
• Detox scams that try to convince you your liver needs a cleanse more than your browser history.
• Weight-loss miracles promoted on TV and social media with “doctor-approved” language and zero actual science.
• COVID-related fraud during the pandemic, from bogus preventatives to miracle treatments.

In these cases, it’s not enough to simply shut down the scam. The victims have already lost real money,
often in the hundreds or thousands of dollars. For some, especially those with serious illnesses,
that money could have gone toward legitimate medical care.

Without an easy path to restitution, there’s a serious risk that:

• Consumers never get compensated for their losses.
• Fraudsters treat injunctions as just another cost of doing business especially if they’ve already pocketed their profits.
• Regulators may be less likely to bring cases if they can’t realistically get money back for victims.

In short: the ruling may be doctrinally neat from a legal standpoint, but it makes life easier for scam artists and harder for consumers.

So what tools does the FTC still have?

The Supreme Court didn’t say the FTC can never get monetary relief. It said the FTC can’t do it under Section 13(b).
That means the FTC now has to lean much more heavily on other legal tools which exist, but come with strings attached.

Section 19: The long road

Section 19 of the FTC Act allows the agency to seek:

• Rescission or reformation of contracts.
• Refunds of money or return of property.
• Payment of damages and other monetary relief.

Sounds great, right? The catch is that Section 19 usually requires:

• A prior administrative proceeding and a final cease-and-desist order, or
• A violation of a specific trade regulation rule (like the Telemarketing Sales Rule or rules under ROSCA).

That takes time, resources, and legal stamina. For fast-moving scams especially online
the slow lane of Section 19 is a serious handicap.

Civil penalties and rule violations

After losing the 13(b) shortcut, the FTC has also turned to other statutes that allow both
civil penalties and consumer redress when companies violate specific rules.
One high-profile example involves the Restore Online Shoppers’ Confidence Act (ROSCA),
a law that targets deceptive subscription practices and “negative option” billing.

In recent years, the FTC has used ROSCA to go after companies including major online platforms
for tricking consumers into auto-renewing subscriptions or making cancellation deliberately complicated.
These cases can result in both civil penalties per violation and consumer restitution,
but again, only when a specific rule or statute is in play.

Injunctions still matter (but money talks)

The Supreme Court’s decision leaves the FTC’s ability to get injunctive relief intact.
The agency can still ask courts to:

• Stop ongoing deceptive or unfair practices.
• Freeze assets to prevent further harm while other proceedings play out.
• Impose compliance obligations, reporting, or monitoring provisions.

But injunctions alone don’t pay medical bills or restore drained savings accounts.
For deterrence and fairness, money matters. That’s why Section 13(b) had been so central to
the FTC’s consumer protection mission.

Can Congress fix this?

The Supreme Court didn’t say that monetary relief is a bad idea.
In fact, the justices explicitly noted that Congress is free to give the FTC
broader remedial authority if it wants to. Translation: “If you don’t like this outcome,
take it up with your legislators.”

After the decision, there were bipartisan calls in Congress to amend the FTC Act and
restore the agency’s authority to obtain restitution directly in federal court.
Legislative proposals have floated ideas such as:

• Adding explicit language to Section 13(b) authorizing courts to order restitution and disgorgement.
• Clarifying time limits and procedural safeguards to address concerns about due process and retroactivity.
• Codifying certain types of monetary relief for specific categories of fraud, including health-related scams.

Whether Congress will ultimately act and how broad any fix will be remains an open question.
But from a science-based consumer protection perspective, restoring a clear and efficient path to refunds
is crucial, especially in areas like health products where the line between hope and harm can be thin.

Real-world experiences in a post-AMG world

Legal doctrine is all well and good, but what does this look like on the ground?
Below are composite, experience-based scenarios drawn from enforcement trends,
public cases, and commentary from lawyers, regulators, and consumer advocates
the kinds of situations that Science-Based Medicine readers will recognize all too well.

1. The “miracle” supplement clinic

Picture a clinic that markets a high-priced “immune reboot” program: IV vitamin drips, proprietary supplements,
and weekly “detox” sessions, all promoted as capable of treating everything from chronic fatigue to cancer.
The testimonials are glowing, the science is nonexistent, and the disclaimers are microscopic.

Before the Supreme Court’s decision, the FTC might have:

• Filed a 13(b) case in federal court.
• Shut down the deceptive advertising with an injunction.
• Obtained a monetary judgment requiring the clinic to refund patients.

Now, the agency has to think more strategically:

• Is there an existing rule say, about health claims or telemarketing that the clinic is violating?
• Is it worth investing the time in a full administrative case to set up Section 19 relief later?
• Will the clinic still have assets by the time that process is done?

For patients who already spent thousands of dollars, that shift can mean the difference between
eventually getting a refund and simply being told, “We stopped them from doing it again. Sorry about your wallet.”

2. The online subscription trap

Consider a digital “wellness” platform that signs people up for auto-renewing subscriptions
with vague disclosures and a cancellation process designed by someone who really hated user experience.
Consumers think they signed up for a one-time trial; their credit cards say otherwise.

Post-AMG, the FTC is increasingly using laws like ROSCA and related rules to attack these schemes.
Those laws allow the agency to seek:

• Civil penalties for each violation.
• Consumer restitution tied to the deceptive subscriptions.

In practice, this has led to large settlements where companies pay both penalties and refunds.
For consumers, that means there is still a meaningful path to money back but only because
the conduct fits within the scope of specific rule-based authority, not because of a broad 13(b) power.

3. Clinicians and skeptics in the middle

Health professionals who practice science-based medicine often find themselves trying to
clean up the mess created by unregulated or poorly regulated health products:

• A patient who spent thousands on a “natural cancer cure” instead of getting evidence-based treatment.
• Someone who delayed addressing a serious condition while chasing a series of detoxes and cleanses.
• Families who used pseudoscientific “brain training” programs instead of established therapies.

When these patients realize they’ve been misled, they naturally ask:
“Can I get my money back? Doesn’t the government do something about this?”

Clinicians and consumer advocates now face a more frustrating answer.
Yes, the government can act. Yes, the FTC still brings enforcement cases and issues warning letters.
But the path to restitution is narrower and slower, and in many cases,
it will depend on state consumer protection laws or private class actions rather than
a straightforward federal process.

4. How regulators and lawyers are adapting

Lawyers who advise health product companies including those trying to stay on the right side of the law
report that the AMG decision has changed the risk calculations. On one hand,
losing the 13(b) restitution threat might make some bad actors feel bolder.
On the other, the FTC is signaling that when it does have a clear path to monetary relief
(through rule violations, ROSCA, or Section 19), it’s going to use it aggressively.

Meanwhile, consumer advocates emphasize that the solution can’t just be clever lawyering around the edges.
If we want a marketplace where pseudoscience isn’t rewarded and victims aren’t left holding the bag,
the legal toolkit has to match the scale and speed of modern fraud especially in health and wellness.

Conclusion: Why this ruling matters for science-based medicine

The Supreme Court’s decision that the FTC cannot seek restitution under Section 13(b) might look like a narrow,
technical ruling about statutory interpretation. In reality, it reshaped the landscape of consumer protection.

For people who care about science-based medicine, the stakes are clear:

• Fraudulent health products and quack treatments are still everywhere.
• The FTC still has tools to fight them, but its fastest and most flexible money-back option has been removed.
• Victims of health fraud now face more uncertainty about whether they will be made whole.
• The need for legislative reform, robust state enforcement, and private litigation has only grown.

Until Congress acts to restore a clear, efficient path to restitution,
the burden will fall heavily on consumers to be skeptical, on clinicians to educate,
and on skeptics and science communicators to shine a spotlight on pseudoscience and fraud.
The law may have taken away one of the FTC’s sharpest tools,
but it hasn’t changed the basic reality: if something sounds too good to be true,
it probably belongs in a regulatory case file not in your medicine cabinet.