WASHINGTON, D.C. — The Federal Trade Commission issued a series of actions last week aimed at cracking down on restrictive employment practices, probing the risks of artificial intelligence chatbots, and permanently banning operators of a fraudulent student loan debt relief scheme.
On September 10, FTC Chairman Andrew N. Ferguson sent warning letters to several healthcare employers and staffing firms, urging them to review employment contracts for unlawful noncompete clauses. The agency expressed concern that such agreements—particularly when applied to doctors, nurses, and other critical workers—limit professional mobility and reduce patient choice, especially in rural areas where access to care is already strained.
“Enforcement against unreasonable noncompete agreements remains a top priority for the Federal Trade Commission,” said Kelse Moen, Deputy Director of the Bureau of Competition. The FTC cited its authority under Section 5 of the FTC Act to challenge contracts deemed overbroad, unfair, or anticompetitive.
The letters came less than a week after the Commission withdrew from defending the Biden-era nationwide noncompete ban, which had been blocked in court. Chairman Ferguson stressed that the agency would continue to police individual violations, saying the FTC remains committed to “enforcing the antitrust laws aggressively against noncompete agreements.”
One day later, the FTC announced a new inquiry into consumer-facing AI chatbots that mimic human interaction, particularly their use among children and teens. Using its 6(b) authority, the agency ordered seven major companies—including Alphabet, Meta, OpenAI, and Snap—to provide information on safety measures, monetization practices, data handling, and compliance with child privacy laws.
“Protecting kids online is a top priority for the Trump-Vance FTC, and so is fostering innovation,” Ferguson said. “As AI technologies evolve, it is important to consider the effects chatbots can have on children, while also ensuring that the United States maintains its role as a global leader.”
The inquiry reflects growing concerns that chatbots designed to act as companions may encourage children to form emotional attachments and share personal information. The FTC is seeking details on how companies test for potential harms, limit usage by minors, and notify parents about risks.
Separately, the FTC secured permanent bans against Eric Caldwell and David Hernandez, two individuals accused of running a student loan debt-relief scam through Nevada-based Superior Servicing. The Commission alleged the operators posed as affiliates of the Department of Education, collected illegal upfront fees, and pocketed consumers’ payments instead of applying them to loan balances.
Under proposed federal court orders, Caldwell is barred from both the debt-relief and telemarketing industries, while Hernandez is prohibited from violating the Telemarketing Sales Rule. Both are banned from charging upfront fees, misrepresenting services, or impersonating government entities. They must also surrender more than $1.6 million in cash and assets, with a suspended judgment of nearly $46 million that could be reinstated if financial misrepresentations are discovered.
Litigation remains ongoing against a third defendant and the corporate entities involved.
The three enforcement actions underscore the FTC’s active posture under Ferguson’s leadership, signaling continued scrutiny of labor markets, emerging technologies, and financial fraud targeting vulnerable consumers.
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