Nine New or Revised FTC Rules Released in 2024

For almost the last 50 years, the FTC has promulgated very few rules, but suddenly in 2024 the FTC issued nine new or revised rules. This article summarizes each of these rules and their present status. The article also lists four especially noteworthy existing FTC rules. While generally there is no direct private action for violation of FTC rules, the article sets out the major implications for individual or class litigation of each listed rule.

Far more detail on the content of significant FTC rules, FTC rulemaking, and implications of FTC rules for private litigation is found in the recently released Fifth Edition of NCLC’s Federal Deception & Abuse Law. That treatise also includes two chapters on the Telephone Consumer Protection Act, and other chapters on federal and state RICO, false claims acts, CFPB interpretations, and regulation of debt relief services. See also NCLC’s Unfair and Deceptive Acts and Practices §§ 3.2.6, 3.3 (11th ed. Feb. 2025) (FTC rule violations as state UDAP violations).

1.  FTC Strengthens the Telemarketing Sales Rule

The importance of the FTC’s Telemarketing Sales Rule (TSR), 16 C.F.R. part 310, too often is overlooked, with key substantive restrictions and disclosures for an array of transactions made over the telephone. See the discussion below under “Four Especially Noteworthy Older FTC Rules.” Unlike other FTC rules, there is an explicit but limited private right of action. 

New amendments to the TSR, 89 Fed. Reg. 26,760 (Apr. 16, 2024), effective May 16, 2024, expand the rule’s scope to prohibit material misrepresentations in business-to-business telemarketing calls.  Effective October 15, 2024, the amendments also substantially expand the scope of the records that telemarketers and sellers must keep and increase the mandatory retention period from two to five years. The new retention requirements include:

• A copy of each unique prerecorded message and a record of each telemarketing call;
• A record of each telemarketing call, which must include significant additional detail;
• More information about customers;
• Specific information regarding any claimed established business relationship;
• A complete record of consent;
• Information about requests to be put on the seller’s internal do-not-call list; and
• Records of service providers the telemarketer used to deliver outbound calls.

See the just-released fifth edition of NCLC’s Federal Deception & Abuse Law §§ 5.8, 7.5.4.6.

Major Implication for Consumer Litigation:  Even though they were adopted as part of the TSR, the greatest impact of these new amendments on private litigation will be for Telephone Consumer Protection Act (TCPA) claims that involve telemarketing robocalls.  For example, the new recordkeeping requirements should facilitate certification of TCPA class actions by making it easier to identify which consumers have consented to receive telemarketing calls and which consumers have not.  The longer retention period also means that the records must be kept for one year more than the four-year statute of limitations that most courts apply to the TCPA.  See NCLC’s Federal Deception & Abuse Law § 7.5.8. 

2. Fifth Circuit Vacates FTC CARS Rule

The FTC promulgated the Combating Auto Retail Scams (CARS) rule on January 4, 2024.  It would have prohibited motor vehicle dealers from making certain misrepresentations, required accurate pricing disclosures in dealers’ advertising and sales communications, required dealers to obtain consumers’ express, informed consent for charges, prohibited the sale of any add-on product or service that confers no benefit to the consumer, and required dealers to keep records of certain advertisements and customer transactions.  See 89 Fed. Reg. 590 (Jan. 4, 2024). 

Two automobile dealer associations immediately petitioned the Fifth Circuit to review the rule, and the FTC on its own initiative stayed the effective date until the resolution of petition.  On January 27, 2025, the Fifth Circuit in National Automobile Dealers Association v. Federal Trade Commission, 2025 WL 304460 (5th Cir. Jan. 27, 2025), vacated the rule on highly technical grounds based on its interpretation of the FTC’s own rulemaking procedures. 

Most FTC rulemaking is pursuant to Magnuson-Moss Act procedures, but the Dodd-Frank Act allows simpler Administration Procedure Act (APA) rulemaking for rules dealing with auto dealers. 12 U.S.C. § 5519(d). FTC procedural rules require an advance notice of proposed rulemaking (ANPR) before it first proposes a rule under Magnuson-Moss procedures. While the Fifth Circuit recognized that APA rulemaking does not require an ANPR, it nevertheless held that FTC had voluntarily agreed to do so by including in its procedural rules the ANPR requirement.

In vacating the rule, the Fifth Circuit held that the failure to provide an ANPR prejudiced the car dealer plaintiffs. 

Major Implication for Consumer Litigation: The rule was vacated on procedural grounds, so the analysis of unfair and deceptive car dealer practices found in the rule’s supplementary information should still be helpful precedent in any state unfair and deceptive acts and practices (UDAP) litigation. See 89 Fed. Reg. 590 (Jan. 4, 2024).  The supplementary information in particular focuses on sales of add-on products and pricing misrepresentations.  For more on UDAP challenges to auto dealer practices, see NCLC’s Unfair and Deceptive Acts and Practices Chapter 7 (11th ed. Feb. 2025).

3. FTC Sharply Limits Non-Compete Clauses

The FTC’s Non-Compete Rule, 16 C.F.R. parts 910 and 912, if it goes into effect, will have a profound effect on many workers. It largely bans non-complete clauses in worker employment contracts—even some fast-food workers now cannot take jobs at other fast-food stores, or even with another franchisee of the same fast-food franchise. The rule makes existing non-compete clauses ineffective except for senior executives.  See 89 Fed. Reg. 38,342 (May 7, 2024). The rule is not promulgated under the FTC’s unfair and deceptive acts and practices standard, but under its unfair methods of competition standard.

The rule was to go into effect on September 4, 2024, but is now tied up in at least three lawsuits challenging the rule.  On August 15, 2024, a Florida federal court enjoined the rule’s application to the individual plaintiff.  See Properties of the Villages, Inc. v. Federal Trade Commission, 2024 WL 3870380, at *1 (M.D. Fla. Aug. 15, 2024). On August 20, 2024, a Texas federal court enjoined the rule from taking effect nationwide. See Ryan, L.L.C. v. Federal Trade Commission, 2024 WL 3879954, at *14 (N.D. Tex. Aug. 20, 2024). On October 3, a Pennsylvania federal court, after having refused to stay the effective date of the rule or to issue a preliminary injunction, refused the challenger’s request that it stay the case until Ryan was resolved.  See ATS Tree Services, L.L.C. v. Federal Trade Commission, 2024 WL 4525514, at *3 (E.D. Pa. Oct. 3, 2024). The FTC has appealed the first two cases to the Eleventh and Fifth Circuits respectively.

Major Implication for Consumer Litigation:  Even though the rule is not presently in effect, the rule’s supplementary information, 89 Fed. Reg. 38,342 (May 7, 2024), explains why non-compete clauses can be unfair methods of competition. A number of state UDAP statutes prohibit not only unfair or deceptive practices, but also unfair methods of competition in trade or commerce. See NCLC’s Unfair and Deceptive Acts and Practices § 5.8.3 (11th ed. Feb. 2025). Moreover, the supplementary information should be helpful in arguing that a non-compete clause is unenforceable.

4.  New Rule Limits Fees for Live Events and Short-Term Lodging

The FTC’s Rule on Unfair and Deceptive Fees, 16 C.F.R. part 464, effective May 12, 2025, addresses unfair or deceptive practices involving fees or charges for live-event tickets and short-term lodging, including temporary sleeping accommodations at a hotel, motel, inn, short-term rental, vacation rental, or other place of lodging. The rule addresses bait-and-switch pricing that hides the total price by omitting mandatory fees and charges from advertised prices; and misrepresenting the nature, purpose, amount, and refundability of fees or charges. See 90 Fed. Reg. 2066 (Jan. 10, 2025).

The rule specifies that it is an unfair and deceptive practice for businesses to offer, display, or advertise any price of live-event tickets or short-term lodging without clearly, conspicuously, and prominently disclosing the total price. Certain disclosures must also be made in advertising and before a consumer consents to pay. The total price must be disclosed more prominently than any other pricing information. Before the consumer pays, the seller must disclose the final amount of payment for the transaction and the nature, purpose, and amount of any fee or charge imposed on the transaction that has been excluded from the total price that was disclosed. 

Major Implications for Consumer Litigation: The rule facilitates private state UDAP claims, including class claims, involving fees for live-event ticketing and short-term lodging because it defines unfair and deceptive practices. In addition, rule violations should fit nicely in the most common definition of an unfair practice—the practice causes significant injury, consumers cannot avoid the practice, and there is no countervailing benefit to competition to violate an FTC rule. NCLC’s Unfair and Deceptive Acts and Practices §§ 3.2.6, 3.3, 4.3.2 (11th ed. Feb. 2025). The rule’s rationale as set out in 90 Fed. Reg. 2066 (Jan. 10, 2025) should also be precedent to challenge undisclosed fees in other types of consumer transactions.

5.  Significant Expansion of the FTC’s Negative Option Rule

The FTC has issued significant amendments to its rule on Prenotification Negative Option Plans and retitled the rule “Recurring Subscriptions and Other Negative Option Programs.”  See 89 Fed. Reg. 90,476 (Nov 15, 2025), amending 16 C.F.R. pt. 425.  The revised rule is also known as the Click to Cancel rule. While part of the rule is effective January 14, 2025, there is a May 14, 2025, compliance date for the most significant provisions, those concerning disclosures, consent, and simple cancellation. The seller must:

• Clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature (§ 425.4);
• Obtain a consumer’s express informed consent to the negative option feature before charging the consumer (§ 425.5); and
• Provide a simple mechanism to cancel the negative option feature and immediately halt charges (§ 425.6). 

Unlike the old rule, the revised rule’s scope is expanded to almost any transaction involving a recurring subscription, including prenotification and continuity plans, automatic renewals, or free trial offers.  It covers offers made in all media, including internet, telephone, in-person, and printed material, all negative option sellers, and business-to-business transactions. The rule establishes a common set of requirements applicable to all types of negative option marketing.

Major Implications for Consumer Litigation: The rule facilitates private state UDAP claims—including class claims—involving negative option subscriptions because it defines unfair and deceptive practices. Violation of this rule should be an unfair practice and failure to disclose that a subscription offer violates a federal rule should be deceptive. See NCLC’s Unfair and Deceptive Acts and Practices §§ 3.2.6, 3.3 (11th ed. Feb. 2025).

6. New FTC Rule on the Use of Consumer Reviews and Testimonials

The FTC has finalized a new rule on Use of Consumer Reviews and Testimonials, 89 Fed. Reg. 68,034 (Aug. 22, 2024), effective October 21, 2024, and codified at 16 C.F.R. part 465. Among other things, the rule prohibits selling or purchasing fake consumer reviews or testimonials, buying positive or negative consumer reviews, certain insiders creating consumer reviews or testimonials without clearly disclosing their relationships, creating a company-controlled review website that falsely purports to provide independent reviews, and selling or purchasing fake indicators of social media influence.  The rule also prohibits practices to suppress legitimate reviews, such as a business using unfounded or groundless legal threats, intimidation, or a public false accusation

Major Implications for Consumer Litigation: The rule facilitates UDAP claims concerning the purchase of overpriced, inadequate, or shoddy goods or services, because it defines deceptive advertising practices that can lead to consumers being deceived about their purchase. 

7. New Rule Prohibits Impersonation of Government Officials or Businesses

The FTC Rule on Impersonation of Government and Businesses, 16 C.F.R. part 461, became effective April 1, 2024. See 89 Fed Reg. 15,017 (Mar. 1, 2024). The rule prohibits directly or by implication: materially and falsely posing as a government entity or officer, or a business or business officer; or materially misrepresenting affiliation with, including endorsement or sponsorship by, a government entity or officer, or a business or a business officer. See NCLC’s Federal Deception & Abuse Law § 2.2.5. 

Major Implications for Consumer Litigation: The rule, by defining unfair and deceptive practices, facilitates private UDAP claims in situations such as a repossessor posing as a government official, letters, phone calls, or emails appearing to be from a government agency (e.g., Social Security, ICE, or the IRS), sales of counterfeit goods, or misrepresentations concerning the affiliation of a school or other entity with well-known companies.  Some of these scams originating offshore may be difficult to address in a private action, but the FTC’s promulgating a rule to prohibit these practices gives the FTC the ability to obtain consumer redress for rule violations. It thus may be helpful to complain to the FTC about a fraud where private litigation is not feasible.  See also NCLC’s Helping Consumers Harmed by Payment Fraud.

8.  New Requirements Where Health Records Are Breached

Effective July 29, 2024, the FTC amended its Health Breach Notification Rule, 16 C.F.R. part 318.  See 89 Fed. Reg. 47,028 (May 30, 2024). The existing rule requires vendors of personal health records and related entities that are not already subject to the privacy and security requirements of HIPPA to notify individuals, the FTC, and, in some cases, the media of a breach of unsecured personally identifiable health data.  The 2024 amendments: 

• Clarify the rule’s scope, including its coverage of developers of many health applications (‘‘apps’’);
• Clarify that a breach of security includes data security breaches and unauthorized disclosures;
• Revise the definition of a personal-health-records-related entity;
• Modernize the method and content of the notice; and
• Alter the Rule’s timing requirement for notifying the FTC of a breach of security.

Major Implications for Consumer Litigation: Any rule violation is defined by federal law as an unfair or deceptive act or practice.  42 U.S.C. § 17937(e).  Thus, any rule violation should also be an unfair or deceptive act or practice under a state UDAP statute. See NCLC’s Unfair and Deceptive Acts and Practices § 3.2.6 (11th ed. Feb. 2025).

9. FTC’s Eyeglass Rule Is Amended

The FTC has amended the Ophthalmic Practice Rules (Eyeglass Rule), 16 C.F.R. part 456, effective September 24, 2024. See 89 Fed. Reg. 60,742 (July 26, 2024). The existing rule declares it an unfair practice for an optometrist or ophthalmologist to fail to give a patient a copy of the patient’s eyeglass prescription immediately after an eye examination is completed. The prescriber may not charge the patient any fee in addition to the prescriber’s examination fee as a condition of releasing the prescription to the patient.

The 2024 amendments require that prescribing eye care practitioners obtain a signed confirmation from the patient after releasing to the patient the eyeglass prescription and maintain each such confirmation for a period of three years. The prescription release can be provided digitally if the provider first obtains the patient’s verifiable affirmative consent and maintains a record of such consent for three years. The amendments further clarify that presentation of proof of insurance coverage is deemed as payment for the purpose of determining when a prescription must be provided. 

Major Implications for Consumer Litigation: The amendment facilitates private UDAP litigation, by helping to prove a rule violation. The seller’s inability to produce the patient’s signed confirmation of receipt will be strong evidence that the provider failed to provide the patient with a prescription, where the patient’s visit occurred within the last three years. 

Four Especially Noteworthy Older FTC Rules 

While 2024 was the most active year for FTC rules in at least a generation, practitioners should not forget older FTC rules (some over 50 years old) that can significantly aid consumer litigation. Below is a bird’s eye view of four important older FTC rules and their implications for consumer litigation:

Rule on Preservation of Consumer Claims and Defenses (the Holder Rule), 16 C.F.R. part 433, requires that credit agreements include the “Holder Notice,” which states that the holder is subject to all claims and defenses that the consumer could raise against the transaction’s seller. The rule applies where the seller has assigned the credit contract to a third-party financer or where a lender related to the seller extends credit directly to the consumer to purchase the goods or services. 

If the consumer’s seller-related claims are large enough, this allows for cancellation of the remaining indebtedness plus an affirmative recovery of all amounts already paid on the credit transaction, and most likely also the consumer’s attorney fees under a fee-shifting statute. Even if the Holder Notice is missing from an agreement, in most cases the Holder Notice will be enforced as if it were in the agreement. The definitive analysis of the FTC Holder Rule is found at Chapter 4 of the newly released fifth edition of NCLC’s Federal Deception & Abuse Law.

Major Implications for Consumer Litigation: The Holder Rule is the most significant FTC rule for its effect on consumer litigation, giving consumers leverage in defending against a creditor’s collection actions by raising all claims and defenses the consumer had against the seller. It also allows individual and class litigation against a deep pocket creditor for the seller’s abuses, instead of having to recover from an insolvent seller. 

Telemarketing Sales Rule, 16 C.F.R. part 310, is a powerful and under-utilized FTC rule. It does far more than just regulate telemarketing sales representations.  It bans remotely created checks (telechecks) and certain other methods as payment for telemarketing sales. See NCLC’s Federal Deception & Abuse Law § 5.4.4.2.  For all types of payments (other than credit and debit card payments), the seller or telemarketer must obtain the consumer’s “express verifiable authorization” to submit the billing information. See id. § 5.4.4.3. 

The rule also has important requirements specifically related to:

• Advance fee loans, id. § 5.5.1;
• Credit repair, id. § 5.5.2;
• Offers to recover amounts lost through past telemarketing fraud, id. § 5.5.3;
• Debt relief services, id. § 5.5.4;
• Credit card protection products, id. § 5.5.5;
• Investment and business opportunity schemes, id. § 5.5.6;
• Prize promotions, id. § 5.5.7;
• Charitable contributions, id. § 5.5.8.

Major Implications for Consumer Litigation: In contrast to other FTC rules, the enabling statute for this rule creates an explicit private right of action, but actual damages in an individual or class action must exceed $50,000 for each consumer.  This amount cannot include punitive damages, but it can include consequential damages, such as damage to a consumer’s creditworthiness, which could exceed $50,000 when a home mortgage is involved. This threshold amount is not indexed for inflation so becomes more attainable in consumer cases with each passing year. The consumer must be adversely affected by a “pattern or practice” of rule violations. A prevailing consumer recovers attorney fees and costs. Liability extends to telemarketers, sellers hiring the telemarketers, and others facilitating a violation. There is a three-year statute of limitations after discovery of the violation.  Id. §§ 5.6, 5.7.

Where actual damages are less than $50,000, TSR violations should be actionable under a state UDAP statute. See the discussion at #4, supra, explaining that a rule violation should also be a UDAP violation. See also NCLC’s Unfair and Deceptive Acts and Practices §§ 3.2.6, 3.3 (11th ed. Feb. 2025).

Used Car Rule, 16 C.F.R. part 455, requires that a window sticker be affixed to used vehicles on the dealer’s lot containing specified information about warranty coverage and service contracts; a copy of the window sticker must be provided to the consumer; the information from that sticker must be incorporated into the sales agreement; no statements can be made to the consumer contradicting information on the sticker; a series of misrepresentations are prohibited; and certain warranty information must be disclosed. See NCLC’s Federal Deception & Abuse Law § 2.4. 

Major Implications for Consumer Litigation: The window sticker facilitates warranty and state UDAP deception claims where the sticker indicates that implied or express warranties are given with the sale, but the dealer represents, or the sales agreement identifies the transaction as “as is” or without warranties. The same is true if the agreement provides for warranties but the guide discloses the sale as “as is” or the contract is silent on warranties and the window sticker states the sale is “as is,” since the contract’s silence means that implied warranties are not disclaimed. 

In addition, since the FTC Used Car Rule was promulgated under both the FTC Act and the federal Magnuson-Moss Warranty Act, a good argument can be made that it is a violation of the Magnuson-Moss Warranty Act to violate the Used Car Rule, allowing for actual damages and attorney fees.  And it should be a violation of a state UDAP statute that also provides actual damages and attorney fees, but may also provide treble, statutory, or punitive damages.

Credit Practices Rule, 16 C.F.R. part 444, defines finds six different creditor remedies as unfair in consumer credit transactions:

• Credit agreements that contain confessions of judgment (cognovit) clauses, whereby the consumer confesses judgment in a creditor’s collection lawsuit, id. § 2.3.4;
• Credit agreements that contain a waiver of the consumer’s statutory exemptions protecting wages, bank accounts, and property from post-judgment seizure, id.§ 2.3.5;
• Credit agreements that contain an advance assignment of the consumer’s wages to pay the creditor, id. § 2.3.6;
• Non-purchase-money security interests in most household goods, id. § 2.3.7;
• Certain pyramiding of late charges so that one missed payment leads to multiple late charges, id. § 2.3.8; and
• Failure to include a warning notice when obtaining a co-signer’s signature guaranteeing credit, id. § 2.3.9.

Major Implications for Consumer Litigation: Consumers should have conversion and state UDAP claims when creditors enforce prohibited creditor remedies. For example, a creditor garnishing exempted wages relying on a contractual waiver of exemptions should be liable for the seized wages and consequential damages, and perhaps punitive damages. Repossessing household goods with only a non-purchase-money security interest should be conversion.  Moreover, mere inclusion of the offending terms can lead to claims even when the terms are not enforced.