FTC Whistleblower Reward

Learn About FTC Whistleblower Reward Eligibility, Amounts, and More from the Lawyers at Oberheiden P.C.

Like many other federal agencies, the Federal Trade Commission (FTC) relies heavily on U.S. residents and citizens to help it fight fraud, waste, abuse, and unfair business practices. While the FTC has substantial enforcement resources at its disposal, it often will not know that enforcement proceedings are warranted unless and until someone comes forward.

However, unlike many other federal agencies, the FTC does not currently issue whistleblower rewards—it does not have the statutory authority to do so. While this could change under proposed legislation to incentivize whistleblowers, at present FTC whistleblower rewards are not available from the Commission.

Despite this being the case, FTC whistleblowers may still be entitled to rewards in some cases. Specifically, FTC whistleblower rewards may be available to individuals who come forward under the False Claims Act. The False Claims Act prohibits fraud, waste, and abuse under all federal contracts and grant programs, including those administered and awarded by the FTC.

The Proposed FTC Whistleblower Act of 2024

Under existing federal law, including the Whistleblower Protection Act, whistleblowers who come forward directly to the FTC are entitled to confidentiality and protection against whistleblower retaliation. However, there currently is not an FTC whistleblower reward program. To address this, Representative Janice Schakowsky introduced the FTC Whistleblower Act of 2024 (H.R. 10118).

To be clear, at the time of writing, the FTC Whistleblower Act of 2024 is not federal law. The bill was introduced in the House of Representatives on November 13, 2024 and referred to the Committee on Education and the Workforce and the Committee on Energy and Commerce. Similar efforts have failed in the past, and it currently is not clear that the FTC Whistleblower Act of 2024 will receive the bipartisan support it needs to pass.

But, if it does pass, it will establish an FTC whistleblower program designed to award whistleblowers who provide original information leading to successful enforcement actions. In its current form, H.R. 10118 provides that:

“If a whistleblower (or group of whistleblowers) voluntarily provides to the Commission original information regarding an alleged covered violation and such original information leads to the successful resolution of a covered action, the Commission, subject to subsection (b), shall pay an award to the whistleblower (or group of whistleblowers) in an aggregate amount of . . . not less than 10 percent . . . [and] not more than 30 percent, in total, of collected monetary sanctions imposed as a result of the relevant covered action.”

As proposed, subsection (b) of the bill states that FTC whistleblower reward amounts will be determined in the Commission’s discretion and take into account factors including the significance of the original information provided and the degree of additional assistance provided by the whistleblower. It also specifies circumstances in which an FTC whistleblower reward could be denied, including when the whistleblower is convicted of a crime in relation to the fraud, waste, or abuse disclosed and when the whistleblower acquired the original information in the normal course of his or her employment with the FTC or another federal law enforcement agency.

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Dr. Nick Oberheiden

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Former U.S. Attorney

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55th Speaker, U.S. House of Representatives (ret.)

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Mike Pompeo

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Former U.S. Secretary of State

John W. Sellers

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Linda Julin McNamara

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Nicholas B. Johnson

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Roger Bach

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Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

FTC Whistleblower Rewards Under the False Claims Act

FTC whistleblower rewards may be available under the False Claims Act in some cases. As noted above, the False Claims Act prohibits fraud, waste, and abuse under federal contracts and grant programs, or what the statute refers to as “false or fraudulent claim[s] for payment or approval.”

Under the False Claims Act, qualifying individuals who help government agencies pursue successful enforcement actions are entitled to a reward calculated as between 10% and 30% of the monetary sanctions collected. In FTC enforcement cases, whistleblower reward amounts have the potential to be substantial.

Coming forward under the False Claims Act and filing a whistleblower complaint directly with the FTC are very different processes. To ensure that you choose the right process—and to ensure that you adhere to all applicable requirements—it is essential to have a highly experienced whistleblower lawyer on your side.

At Oberheiden P.C., we assist individuals with both types of FTC whistleblower cases. Our senior lawyers can work with you one-on-one to determine if you are eligible to secure whistleblower status in cases involving financial institutions or other entities regulated by the FTC. If so, we can assist you with submitting your whistleblower complaint; and, if you are eligible to file under the False Claims Act, we can assist with securing your FTC whistleblower reward if your complaint leads to a successful enforcement action.

5 Tips for Maximizing Your Chances of Obtaining an FTC Whistleblower Reward

With all of this in mind, what do you need to do to maximize your chances of obtaining an FTC whistleblower reward? Here are five tips from our senior whistleblower lawyers:

• Consult with a Lawyer Before You Blow the Whistle – You should consult with a lawyer before you do anything with the information you have in your possession, including if you are one of the former employees of an entity under FTC investigation. At Oberheiden P.C., our lawyers can provide you with the latest updates on the FTC Whistleblower Act of 2024, and we can determine if you are eligible to file your whistleblower complaint under the False Claims Act.
• Do Not Go Public with the Information You Have in Your Possession – To qualify as a federal whistleblower, you must generally be the first to come forward with information about the fraud, waste, or abuse at issue. If you go public before you contact the government, you could lose your eligibility for protected whistleblower status.
• Make an Informed Decision About Where (and How) to File Your FTC Whistleblower Complaint – Whether you should file your whistleblower complaint with the FTC, with another federal authority (such as the Office of Special Counsel (OSC)), or in federal court under the False Claims Act will depend on the specific circumstances involved, including whether the wrongdoing was committed by federal employees or private contractors. If you are interested in seeking an FTC whistleblower reward, it is critical that you make an informed decision.
• Be Prepared to work with the FTC (or the DOJ) During Its Investigation – If you are eligible to receive an FTC whistleblower reward, the more you assist with the government’s investigation, the more you will be entitled to receive. As a result, you should be prepared to work with the FTC (or the U.S. Department of Justice (DOJ)) throughout the investigative process.
• Rely on Your Lawyer to Negotiate Your FTC Whistleblower Reward on Your Behalf – Finally, if you become entitled to an FTC whistleblower award payment, you should rely on your lawyer to negotiate the amount of the reward on your behalf. Since rewards can range from 10% to 30% under the False Claims Act, negotiating effectively could play a major role in determining the amount you receive for helping to expose fraud, waste, or abuse committed against the FTC.

These are not all of the steps involved in serving as an FTC whistleblower—far from it, especially in complex fraud schemes that may require extensive documentation. Rather, these are some of the preliminary steps involved in preserving your ability to seek an FTC whistleblower reward (if you are eligible to do so). At Oberheiden P.C., we provide free and confidential consultations to all prospective federal whistleblowers, and we strongly encourage you to contact us so that we can help you make informed decisions about your next steps.

FAQs: What You Need to Know About FTC Whistleblower Compensation