Handy, But Not Quite “Up to” Snuff: FTC Commissioners Clash over “Up To” Earnings Claims and Scope of Penalty Offense Authority

On July 7, the Federal Trade Commission (FTC) and the New York Attorney General announced that consumers would begin receiving refunds from the FTC’s $2.95 million settlement with Handy Technologies (d/b/a Angi Services). The settlement arose from allegations that Handy advertised earnings opportunities for gig workers that were effectively unattainable in practice. While the settlement itself is noteworthy, the accompanying statement from Commissioner Ferguson is equally so, as it underscores continuing disagreement within the FTC regarding the scope of its penalty offense authority and the standards governing “up to” earnings claims.

Background

Since the AMG Capital Management Supreme Court decision in 2021 that stopped monetary enforcement under Section 13(b) of the FTC Act, the FTC has had to get more creative when seeking monetary relief from companies.  (We wrote about the AMG decision and avenues to civil penalties post-AMG here.)  The announcement of refunds stemming from the FTC’s settlement with Handy is a reminder that the FTC is still seeking – often successfully – civil penalties, although the Commissioners are not always aligned on how to do so.  In October 2021, the FTC sent Handy and over 1,100 other gig companies, franchises, multi-level marketing companies, coaching companies, and others a cover letter (Letter) and notice (Notice) stating that the FTC considers certain enumerated practices in the advertising or promotion of money-making opportunities to be deceptive or unfair, and therefore unlawful under the Federal Trade Commission Act’s penalty offense provision [1].  The FTC specified that it considers it unlawful to misrepresent, explicitly or implicitly, that a substantial number of participants have made or can make the represented profits or earnings.  Unfortunately for Handy, its advertisements claimed that Pros could earn “up to” a certain amount for jobs like cleaning and lawnmowing – making its representations subject to scrutiny by the FTC.  

Following an investigation, the FTC filed a complaint against Handy in January 2025, alleging that Handy misrepresented Pros’ earnings (among other unfair or deceptive acts) and did so knowingly because Handy continued to run violative advertisements after FTC sent the Letter, Notice, and a civil investigative demand in 2022.  Specifically, the FTC alleged that Pros could only earn the advertised rates if they met onerous criteria and in reality, practically no Pros earned the advertised rates – rendering the representations a misrepresentation.  Simultaneously with the complaint, the FTC filed a stipulated order, suggesting that it had agreed with Handy to settle the matter, resulting in the distribution of checks announced on July 7th.  

Commissioner Ferguson’s Dissent Highlights Ambiguity Regarding What Constitutes a Predicate Offense

Commissioner Ferguson’s Handy statement, concurring in part and dissenting in part, takes issue with the Handy complaint’s failure to identify a Predicate Offense. Commissioner Ferguson interprets the FTC Act as requiring the Commission to identify a “predicate cease-and-desist order in which the Commission previously determined that the same ‘such act or practice’ (as the one alleged against the current defendant) is unfair or deceptive.” Instead of identifying a specific Predicate Offense, the complaint incorporates the Letter – which summarizes more than a dozen earnings claim cases resulting in final cease-and-desist orders – and the Notice, which lists broad, footnoted examples of unfair or deceptive trade practices related to earnings claims. 

This is not the first time Commissioner Ferguson has disagreed with his fellow Commissioners regarding what is required to establish a penalty offense concerning money-making opportunities. Commissioner Ferguson made the same argument in his statement accompanying the FTC’s settlement with the ride-hailing app, Lyft, where he critiqued reliance on “highly general statements of Section 5’s prohibition on deception or unfairness in previous cease-and-desist orders as the predicate for civil penalties.” 

Takeaway

Recipients in receipt of penalty offense notices should know not only will the FTC be looking – they will be looking for penalties. 

[1] The penalty offense provision of the FTC Act, Section 5(m)(1)(B), permits the FTC to seek civil penalties for penalty offenses. Penalty offenses result when a company (1) engages in conduct that the company knew was unfair or deceptive and (2) the Commission previously determined through a final cease-and-desist order following litigation that the same or substantially similar conduct (i.e., a Predicate Offense) violated the FTC Act.

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