Note:
Nina Cortell, Administrative Law—Magnuson-Moss Warranty-Federal Trade Commission Improvement Act—The FTC Can Obtain Equitable Relief for Deceptive Trade Practices, 53 Texas L. REV 831 (1975).
 

Abstract:
John Heater’s “Honor All Credit Cards” program guaranteed to all participating merchants extending credit to holders of selected cards that the customer would be billed and the payments remitted to the merchant regardless of whether the amounts owed had been paid by the customer. The remittance payments were rarely made, the average member suffering substantial losses. The Federal Trade Commission found that Heater’s retention of funds expended by franchisees and merchants was an unfair trade practice in violation of section 5 of the Federal Trade Commission Act and ordered Heater to reimburse all persons who had spent money in reliance upon the firm’s misrepresentations. The Ninth Circuit in Heater v. FTC, 503 F.2d 321 (9th Cir. 1974), held that the refund order—because it was penal, compensatory, retroactive, and not in the public interest—exceeded the Commission’s remedial authority. The Magnusson-Moss Warranty-Federal Trade Commission Improvement Act, enacted four months later, provides the Commission with a legislative basis for the action Heater rejected. The Act empowers the FTC to commence a civil action and obtain such equitable relief as a court finds necessary to redress injuries caused by the deceptive trade practice. Although the court is not limited in its choice of remedy, the Act specifically suggests rescission or reformation of contracts, refund of money, return of property, payment of damages, and public notification of violations. Freed from the limitations inherent in the cease and desist orders, the FTC can now, for perhaps the first time in its sixty-one year history, take an active role in the regulation of deceptive trade practices by obtaining positive relief for aggrieved persons as well as ordering the cessation of violative practices.