WASHINGTON, D.C. -

The Federal Trade Commission official who championed investigations and handed out significant penalties against dealerships for misdeeds involving financing, advertising and more is departing the regulator.

FTC acting chairman Maureen Ohlhausen announced this week that Jessica Rich, director of the bureau of consumer protection, is leaving the agency on Friday after 26 years of service.

As bureau director, Rich managed eight consumer protection divisions and eight regional offices charged with stopping consumer fraud and deception and protecting consumers’ privacy. Under her tenure, the bureau brought a series of major law enforcement actions, several of which involved dealerships.

SubPrime Auto Finance News reached out to compliance expert Randy Henrick for reaction to this FTC announcement. A leading voice about compliant advertising practices, Henrick was Dealertrack’s regulatory and compliance counsel for 12 years and now conducts industry consulting at www.autodealercompliance.net.

“Well, I would have to say that Ms. Rich’s departure is a great loss to the FTC and to consumer protection interests generally,” Henrick said via email. “She did many positive things. But in recent years, she really fostered the ‘regulation by enforcement’ philosophy on many issues such as dealer advertising.” 

Last September, the FTC asserted nine Los Angeles-area dealerships and their owners used a wide range of “deceptive and unfair” sales and financing practices such as yo-yo financing and payment packing, according to an action filed in the U.S. District Court for the Central District of California that sought to end these practices and return money to consumers.

In March 2015, Rich, the FTC and 32 law enforcement partners announced the results of what they dubbed “Operation Ruse Control,” a nationwide and cross-border crackdown aimed at what they contend was an effort to protect consumers when purchasing or leasing a vehicle. The matter included 252 enforcement actions and six new FTC cases involving more than $2.6 million in monetary judgments.

Rich’s recent efforts weren’t just associated with matters involving dealers before vehicle delivery.

Rich was part of a September 2015 action against Texas-based Tricolor Auto Group, which had to pay $82,777 in civil penalties as part of a settlement to address issues associated with the group’s related finance company. The FTC charged that Tricolor — which specializes in connecting with Hispanic customers at 16 locations in Texas and another lot in Oklahoma City — failed to have written policies and procedures regarding the accuracy of reported credit information and failed to properly investigate disputed consumer credit information.

Rich, who joined the agency in 1991, was a past recipient of the FTC Chairman’s Award, the agency’s highest honor for meritorious service.

“We are grateful to Jessica for her many years of service to the FTC and the public,” Ohlhausen said. “She is a pioneer in consumer protection who spearheaded major initiatives regarding consumers’ privacy, data security, and financial transactions. Many of the FTC’s programs bear her indelible mark.”

As far as the replacement for Rich at the regulator, Henrick added, “Hopefully, her successor will use the FTC’s power under Dodd-Frank to propose and issue regulations in a more transparent manner giving interested parties a chance to comment especially when it comes to the agency’s authority over franchised auto dealers.”

At least for the short term, we now know who Rich’s replacement is as on Wednesday Ohlhausen appointed Thomas Pahl, a partner at the Washington, D.C. law firm of Arnall Golden Gregory, to be the acting director of the FTC’s bureau of consumer protection.

 “Tom’s career demonstrates his continuing commitment to protecting consumers through active enforcement and advocacy that promotes a free and honest marketplace,” Ohlhausen said. “His thoughtful approach will help ensure consumers benefit from thriving competition and innovation.

“Tom’s talent, deep consumer protection experience, and strong principles make him perfect to lead the bureau of consumer protection, and I’m very pleased to have him aboard,” she continued.

Pahl is rejoining the FTC, having served in a number of different roles starting in 1990, including management stints in the FTC’s bureau of consumer protection as assistant director in the division of advertising practices and the division of financial practices. He also advised top agency officials on consumer protection matters.

For three years, Pahl advised Reagan appointee and FTC commissioner Mary Azcuenaga. And he later served for four years as an attorney advisor for Republican FTC commissioner Orson Swindle.

Pahl previously served a detail to the U.S. Senate Judiciary Committee under the leadership of chairman Orrin Hatch, focusing on antitrust and consumer privacy issues. Pahl also has worked as an adjunct professor of law at George Mason University’s Antonin Scalia Law School, and is a member of the Federalist Society.

More recently, Pahl has worked on consumer financial protection issues (especially credit reporting and debt collection issues) as a partner at Arnall Golden Gregory, and on debt collection issues at the Consumer Financial Protection Bureau.