How to handle a Federal Trade Commission Civil Investigative Demand

If your business has received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) related to consumer protection, it is time to sit up and take notice. There is a strong chance that investigators and attorneys at the FTC suspect your business may have violated the law. Alternatively, the FTC sometimes sends CID's to obtain information from third parties that have a connection with the targeted business. CIDs are often used to obtain basic information about the business as well as information about its products, services, operations and customers.

Your first order of business should be to consult with your legal counsel, or find legal counsel if you do not already have one for your business. The attorney will review the letter, meet with you, and discuss what type of information you have and how it is stored (particularly with digital files or emails) and then contact the FTC attorney to confer on responding to the CID. The attorney can also advise you on your legal options and a strategy for handling the CID. There may be defenses to providing some of the requested documents, such as the attorney-client privilege.

Will the CID lead to a lawsuit?

The CID will not necessarily lead to a lawsuit. Sometimes, the FTC will review the information presented in response to the CID and conclude that there is no violation of law. In that case, the FTC will close the investigation. In other cases, after the FTC reviews the information, it will seek to negotiate a settlement with the business. This settlement will require that the business halt its allegedly illegal actions or behavior. It may also require customer refunds or a civil penalty. As a last resort to resolving a matter, the FTC will file a lawsuit. 

What happens if we do not respond to the CID?

If your business does not respond to the CID, the FTC may go to court for assistance in enforcing the CID. Then the FTC will come back with a court order requiring that your business produce the requested documents and materials.

Are there other options to fight the CID other than ignoring it?

Your business also has the option to file a petition to limit the CID or quash the CID. There are certain situations which provide grounds to fight back against the CID in court. If your attorney reviews the CID and your situation, he or she can advise you on whether either of these options apply.

Where can I find an attorney to assist with the response to the CID?

Please contact Harmony Law, LLC if you need assistance responding to a CID. You can call Harmony Law, LLC at (970) 488-1857 or reach Harmony Law, LLC through its contact page.