Welcome to Wiley’s replace on current developments and what’s subsequent in client safety on the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this text, we analyze current regulatory bulletins, recap key enforcement actions, and preview upcoming deadlines and occasions. We additionally embrace hyperlinks to our articles, blogs, and webinars with extra evaluation in these areas. We perceive that protecting on high of the quickly evolving regulatory panorama is extra essential than ever for companies looking for to supply new and ground-breaking applied sciences.
Regulatory Announcements
FTC Announces MOU with NLRB to Address Employment-Based Consumer Protection Issues. On July 19, the FTC introduced that it entered right into a memorandum of understanding (MOU) with the National Labor Relations Board (NLRB). The MOU states that the “FTC and NLRB share an interest in protecting American workers and promoting fair competition in labor markets.” The MOU identifies quite a few “issues of common regulatory interest,” together with labor market developments associated to the “gig” economic system, various work preparations, using noncompete and nondisclosure provisions in employment contracts, and the affect of algorithmic decision-making on employees, amongst different issues. The FTC and NLRB state that the needs of the MOU are to “facilitate (a) information sharing and cross-agency consultations on an ad hoc basis for official law enforcement purposes, in a manner consistent with and permitted by the laws and regulations that govern the Parties, (b) cross-agency training to educate each Party about the laws and regulations enforced by the other Party, and (c) coordinated outreach and education as appropriate.”
FTC Publishes Blog Post on ‘Highly Sensitive’ Nature of Health and Geolocation Data. On July 11, FTC workers printed a weblog publish emphasizing the company’s deal with defending an individual’s well being and exact location information as delicate private data. As we mentioned in additional element, the FTC’s weblog publish discusses methods by which such information could also be collected, shared, and bought, and notes that the company is “committed to using the full scope of its legal authorities to protect consumers’ privacy” and that it “will vigorously enforce the law if [the FTC] uncover[s] illegal conduct that exploits Americans’ location, health, or other sensitive data.”
Significant Enforcement Actions
FTC and Multistate Group File Suit and Settle with Jewelry Retailer Based on Alleged Violations of the Military Lending Act. On July 20, the FTC introduced that it filed swimsuit in opposition to and reached a settlement with Harris Jewelry for alleged violations of state regulation, the Federal Trade Commission Act (FTC Act), the Truth in Lending Act (TILA), the Electronic Fund Transfer Act (EFTA), the Holder Rule, and the Military Lending Act (MLA). The lawsuit represents the primary motion taken by the FTC beneath the MLA in reference to jewellery gross sales and financing to members of the navy. The Commission voted 5-0 to approve the grievance and stipulated order, which was filed within the U.S. District Court for the Eastern District of New York. The grievance alleges that the corporate focused younger service members on the lowest pay grades and: made false or unsubstantiated claims that financing jewellery purchases by the corporate would lead to larger credit score scores; misrepresented that safety plans had been required to finance purchases; failed to incorporate written disclosures in its retail installment contracts as required by TILA and the MLA; failed to fulfill authorization necessities as required by the EFTA. Harris Jewelry additionally allegedly failed to supply written discover in its contracts as required by the FTC’s Holder Rule and did not make oral disclosures on the time of sale as required by the MLA. Under the proposed order with the FTC and a gaggle of 18 states, Harris Jewelry should cease assortment of tens of millions of {dollars} in debt, present roughly $10.9 million in refunds for bought safety plans, present refunds for overpayments, help with the deletion of any unfavorable credit score entries pertaining to debt in customers’ credit score reporting file, and as soon as its obligations beneath the order are met, full its shutdown of operations and dissolve pursuant to relevant state legal guidelines.
CFPB Fines Bank of America for Alleged EFTA and Other Violations in Relation to the Disbursement of State Unemployment Insurance Benefits. On July 14, the CFPB issued an order in opposition to Bank of America, Inc. (Bank of America) for alleged violations of the Consumer Financial Protection Act of 2010 (CFPA); EFTA; and the EFTA’s implementing Regulation E. The stipulation and consent order alleges that Bank of America did not conduct affordable investigations of pay as you go debit cardholders’ notices of error; did not well timed examine and resolve pay as you go debit cardholders’ error claims; and made it tough for customers to unfreeze their pay as you go debit playing cards or to report fraudulent use of their playing cards. The order requires Bank of America to supply client redress and to pay a $100 million-dollar civil cash penalty. In a separate order, the Office of the Comptroller of Currency (OCC) is fining the financial institution $125 million.
CFPB Seeks to Enjoin Payday Lender for Allegedly Unlawful Lending Practices. On July 12, the CFPB filed a lawsuit in opposition to Populus Financial Group, Inc. d/b/a ACE Cash Express, Inc. (ACE Cash Express) within the U.S. District Court for the Northern District of Texas for alleged violations of a 2014 CFPB order and the Consumer Financial Protection Act. The CFPB alleged that ACE Cash Express hid a free reimbursement plan from customers who had been entitled to it, as an alternative inducing them to refinance their loans for added charges, and withdrew cash from debtors’ financial institution accounts with out authorization. The Bureau seeks everlasting injunctive reduction, redress for customers, and civil cash penalties.
Upcoming Comment Deadlines and Events
FTC Seeks Comment on Revised Endorsement Guides. On May 19, the FTC permitted a Request for Public Comment on Amendments to the Guides Concerning the Use of Endorsements and Testimonials in Advertising (Request for Comment) that proposes quite a few revisions to the FTC’s Endorsement Guides. Among different issues, the Request for Comment seeks enter on treating the deletion of unfavorable critiques or the choice to not publish unfavorable critiques as a misleading act or follow beneath Section 5 of the FTC Act; addresses endorsements made on social media posts; and solicits suggestions on including a piece to the Endorsement Guides targeted on promoting in direction of kids. The Request for Comment will quickly be printed within the Federal Register, and feedback are due 60 days after the date of publication.
CFPB Extends Feedback Period on Proposed Changes to Credit Card Late Fees and Late Payment Rules. Comments are due August 1 on the CFPB’s Advance Notice of Proposed Rulemaking (ANPR) looking for remark associated to bank card late charges within the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and Regulation Z. The ANPR requests public suggestions on elements utilized by card issuers to set late price quantities; card issuers’ prices and losses related to late funds; the deterrent results of late charges; cardholders’ late fee conduct; strategies that card issuers use to facilitate or encourage well timed funds, together with autopay and notifications; card issuers’ use of the late price secure harbor provisions in Regulation Z; and card issuers’ income and bills associated to their home client bank card operations.
FTC Requests Information on Revising Its ‘.com Disclosures’ Guidance on Digital Advertising. Comments are due August 2 on a Request for Information (RFI) looking for touch upon revisions to the FTC’s enterprise steerage titled, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.” The information, which was initially printed in 2013, offers steerage to companies on tips on how to make promoting and advertising disclosures on-line, notably within the cell context. The RFI seeks touch upon, amongst different issues: promoting embedded in video games, digital actuality, and microtargeted commercials; whether or not the present steerage adequately addresses promoting on cell units; and the “ubiquitous use of dark patterns, manipulative user interface designs used on websites and mobile apps, and in digital advertising that pose unique risks to consumers.”
FTC Seeking Comment on Amendments to the TSR. Comments are due August 2 on a Notice of Proposed Rulemaking (NPRM) and an Advance Notice of Proposed Rulemaking (ANPR) looking for touch upon proposed amendments to the Telemarketing Sales Rule (TSR). The NPRM proposes to amend the TSR to ban business-to-business (B2B) telemarketing calls that qualify as “deceptive” beneath the Rule. It additionally seeks touch upon modifying the TSR’s present record-keeping provisions to require telemarketers to retain robocall recordings, telemarketing scripts, and audio information from telemarketing calls. Further, the NPRM proposes to require telemarketers to retain sure information adequate to indicate {that a} known as get together approved a transaction earlier than they had been charged. The ANPR seeks public suggestions on broader potential TSR amendments, together with whether or not the TSR’s B2B telemarketing exemption needs to be maintained, modified, or eradicated altogether; whether or not the B2B telemarketing exemption disproportionately impacts minority and marginalized communities; whether or not sure inbound calls to telemarketers needs to be coated by the TSR; and whether or not the TSR ought to require sellers that use “negative option” advertising to present customers discover and a way to cancel unfavorable choice applications.
CFPB Extends Comment Period for Input on Relationship Banking and Customer Service. Comments are due August 22 on the CFPB’s Request for Information (RFI) relating to relationship banking and the way customers can assert the proper to acquire well timed responses to requests for details about their accounts from banks and credit score unions with greater than $10 billion in belongings, in addition to from their associates.
FTC Holding Virtual Event on ‘Stealth Advertising’ Toward Children. On October 19, the FTC will host a digital occasion “to examine how best to protect children from a growing array of manipulative marketing practices that make it difficult or impossible for children to distinguish ads from entertainment in digital media.” The occasion will look at evolving practices, such because the “kid influencer” market, and the strategies getting used to promote to kids over the web.
FTC Seeking Research Presentations for PrivacyCon 2022. Research shows are due July 29 for PrivacyCon 2022, which is able to happen just about on November 1. As a part of the occasion, the FTC is looking for empirical analysis and shows on matters together with: algorithmic bias; “commercial surveillance” together with office monitoring and “biometric surveillance”; new treatments and approaches to enhance privateness and safety practices; and the privateness dangers posed by rising applied sciences for kids and teenagers.
More Analysis from Wiley
FTC Highlights Scrutiny of Health and Geolocation Data
West Virginia v. EPA and the Future of Tech Regulation
FTC Uses Enforcement Proceeding to Send Message on Account Security Practices
Top Developments to Watch on the FTC on Privacy
California Privacy Protection Agency Releases Draft CPRA Regulations
Webinar: The FTC’s Changing Approach to Privacy
EU Institutions Reach Agreement on Landmark Regulations Targeting Big Tech
National Privacy Law: Bipartisan Proposed Legislation Regarding Privacy Released
And Then There Were Five: Connecticut Adopts Comprehensive State Privacy Law
FTC Takes Action Against Company for Collecting Children’s Personal Information Without Parental Permission
Lawmakers Continue to Scrutinize Algorithm Use Directed at Youth
U.S. State Privacy Law Guide
Webinar: Transactional Due Diligence Related to Privacy and Cybersecurity
NIST Seeks Feedback on Draft AI Risk Management Framework in Connection with Extensive Stakeholder Workshop
Utah to Add Fourth Omnibus Privacy Law to the Growing State Patchwork
Federal Efforts Introduced to Protect Non-HIPAA Health Data
Webinar: FTC’s Revised Safeguards Rule: How to Navigate New Information Security Requirements
Podcast: Why the FTC Matters for Fintech
Legal 500 US Recognizes Wiley’s Telecom, Media & Technology Practice as Tier 1. Read extra right here.
Download Disclaimer: Information is present as of July 25, 2022. This doc is for informational functions solely and doesn’t intend to be a complete assessment of all proceedings and deadlines. Deadlines and dates are topic to alter.
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