On August 9, the US District Court of Georgia ruled that the FTC had provided “broad and detailed evidence” for its allegations that a tech company and its CEO engaged in deceptive advertising and unfair fee practices in violation of Section 5 of the FTC Act. The FTC’s 2019 complaint alleged the defendants made deceptive representations to customers and charged hidden, unauthorized fees in connection with the company’s “fuel card” as well as through co-branded cards, to companies in the trucking and commercial fleet industry. The FTC’s factual allegations include the following: Continue Reading Court Orders Injunctive Relief Against Tech Company for Deceptive Advertising, Unfair Fee Practices
A.J. is a special counsel in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office.
On August 10, the CFPB issued an interpretive rule stating that digital marketing providers that are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer engagement including purchase or adoption behavior, are subject to the CFPB’s jurisdiction. The rule ostensibly clarifies the scope of companies that are “service providers” under the Consumer Financial Protection Act (“CFPA”) to include digital marketing providers, and thereby subjecting them to the CFPB’s authority to prohibit unfair, deceptive, abusive acts or practices (UDAAPs). Continue Reading CFPB’s New Interpretive Rule Sets Sights on Digital Marketing Vendors
The FTC is seeking public comment on proposed changes to its Endorsement Guides. These changes aim to strengthen the guidelines against advertisers posting falsely positive reviews or by manipulating reviews by suppressing negative ones.Continue Reading FTC Strengthens Advertising Guidelines Against Fake Reviews
On March 22, the CFPB issued Compliance Bulletin 2022-05 regarding potentially illegal practices related to consumer reviews. The guidance states that consumer reviews impact company revenue and help consumers choose between financial providers, which can in turn “incentivize dishonest market participants to attempt to manipulate the review process, rather than compete based on the value of their services, which can frustrate a competitive marketplace.”
Continue Reading CFPB Flexes UDAAP Muscle Over Contractual “Gag” Clauses and Fake Consumer Reviews
On October 28, the FTC issued a new enforcement policy statement warning companies against deploying “illegal dark patterns” that trick or trap consumers into subscription services, and often making websites difficult to navigate to find cancellation or refund options. The statement is intended to assist marketers by providing specific guidance on the FTC’s interpretation of existing law as it applies to “negative option marketing” through deceptive sign up tactics, including unauthorized charges or ongoing billing that is impossible to cancel. The policy statement notes that “[n]egative option offers come in a variety of forms, but all share a central feature: each contains a term or condition under which the seller may interpret a consumer’s silence or failure to take affirmative action to reject a good or service or to cancel the agreement as acceptance or continuing acceptance of the offer.” Examples include automatic renewals, free trials that convert to pay features, and continuous periodic shipments that continue until the customer cancels the shipment.
Continue Reading FTC to Increase Enforcement Against “Dark Patterns” Directed at Consumers