Performance-Based Remedies: Ordering Firms to Eradicate Their Own Fraud

36 Pages Posted: 15 Aug 2017 Last revised: 2 Sep 2017

Lauren E. Willis

Loyola Law School Los Angeles

Date Written: August 13, 2017

Abstract

In resolving cases of unfair, abusive, and deceptive acts and practices, consumer protection enforcement agencies often prospectively dictate—in great detail—the design of defendants’ marketing, websites, disclosures, sales processes, and products. However, advances in technology and analytics increasingly allow defendants to comply meticulously with these precise requirements while simultaneously continuing to deceive and injure consumers.

By trying to micromanage defendants’ conduct, enforcement agencies fail to protect consumers, squander precious enforcement resources, and create pointless compliance work for defendants. Defendants themselves are in the best position to ascertain how to cure the confusion and ill consequences they have wrought and they should bear ultimate responsibility for doing so.

To effectuate this, this article introduces two new performance-based remedies to consumer law enforcement: (1) confusion prohibitions and (2) consequences prohibitions. These injunctive remedies order defendants to eliminate the confusion and ill consequences induced by defendants’ fraud. To comply with these prohibitions, defendants would be required to reduce the confusion and ill consequences they inflicted on their customers to prescribed levels within a prescribed time period. Defendants would bear the costs of demonstrating, through independent third-party audits, their compliance.

Suggested Citation

Willis, Lauren E., Performance-Based Remedies: Ordering Firms to Eradicate Their Own Fraud (August 13, 2017). 80 Law and Contemporary Problems 7-41 (2017); Loyola Law School, Los Angeles Legal Studies Research Paper No. 2017-26. Available at SSRN: https://ssrn.com/abstract=3018168

Lauren E. Willis (Contact Author)

Loyola Law School Los Angeles ( email )

919 Albany Street
Los Angeles, CA 90015-1211
United States
213-736-1086 (Phone)
213-380-3769 (Fax)

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