Ad Law Insights - Legal and Regulatory Updates
FTC + state attorneys general digital marketing compliance, investigation + enforcement advocacy by FTC lawyer to Internet business community
This website is brought to you by Hinch Newman LLP and FTCDefenseLawyer.com.
On September 8, 2026, the Federal Trade Commission announced that a payment processing company will pay $12 million and be permanently banned from processing payments for merchants with a heightened risk of potential fraud to settle allegations that it allegedly processed payments for merchants that defrauded consumers.
According to an FTC compliance lawyer, the FTC’s complaint alleges that the company processed payments for more than 1,000 merchants that were shell entities that served as fronts or pass-throughs for fraudulent companies engaged in unauthorized billing scams.
The company “was processing payments for companies despite red flags indicating they were scamming consumers,” said FTC lawyer Katherine White, Deputy Director of the FTC’s Bureau of Consumer Protection. “This case underscores the FTC’s commitment to holding companies accountable for knowingly supporting fraudulent businesses.”
The FTC alleges that the company:
- Opened and processed payments for merchants it knew, or consciously avoided knowing, were shell companies used by undisclosed third parties engaged in fraud;
- Opened these sham accounts despite red flags indicating the merchants were shells and typically incurred chargebacks at rates that were almost 10 times higher than what credit card brands view as excessive; and
- Attempted to increase the volume of transactions processed through these sham accounts by placing them on a lower-risk bank “BIN” (a bank identification number licensed by the credit card networks), used by an affiliated entity, to improve the likelihood that attempted transactions would be approved by cardholders’ banks.
On August 24, 2026, New York Attorney General Letitia James announced that her office secured $400,000 from Thirty Madison, Inc., an online provider of medications, for allegedly misleading and deceiving customers, causing them to sign up for costly recurring subscriptions.
According to the announcement, Thirty Madison provides both prescription and non-prescription medications for a variety of conditions ranging from hair loss to migraines to skin conditions through its brands Cove, Keeps, and Nurx. An investigation by the Office of the Attorney General (OAG) allegedly found that Thirty Madison failed to clearly disclose its subscription terms and non-refundable fees. Thirty Madison also allegedly failed to provide a simple cancellation process.
“As New Yorkers struggle with a rising cost of living, deceptive recurring fees can add up quickly and make life even harder to afford,” said Attorney General James. “I will not allow New Yorkers seeking accessible health care options to be trapped in costly subscriptions. Companies cannot mislead their customers about subscription terms, and my office will continue to take action to make sure New Yorkers are not unlawfully forced to make expensive recurring payments.”
New York law requires subscription terms to be clearly disclosed to customers, including the minimum length of the subscription, whether the subscription renews automatically, and the cancellation policy. Businesses must also obtain affirmative consent for automatic renewals and offer an easy cancellation mechanism.
The OAG’s investigation allegedly found that Thirty Madison did not clearly disclose its subscription terms to consumers and made it difficult to cancel subscriptions,
On August 19, 2026, the Federal Trade Commission announced it is seeking public comment on an enforcement policy statement regarding personalized pricing, which is the use of personal data to set prices according to the amount that a company believes an individual consumer is willing to spend.
“When consumers see a listed price, they expect it to be same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” said Chairman Andrew Ferguson. “The FTC does not have the legal authority to ban personalized pricing in all circumstances, but businesses that fail to tell consumers how their personal data is being used to set a price may be in violation of the FTC Act and other laws we enforce. We are seeking public input on this draft statement, which would put businesses engaged in or considering personalized pricing on notice that the Trump-Vance FTC will not hesitate to enforce the law in this space.”
This is the latest in a series of actions by the Commission, under President Donald Trump’s leadership, against businesses that mislead consumers with hidden fees and surprise charges.
Consumers expect prices for products and services to change based upon supply and demand, not their web surfing habits or buying history, the statement notes. Retailers that represent or imply that a price is static when it in fact varies by individual are at risk of misleading customers.
On July 2, 2026, the Federal Trade Commission announced that the companies that operate the Hopper travel apps have agreed to pay $35 million and will be prohibited from purportedly deceiving consumers about fees to settle the Federal Trade Commission’s allegations that they unfairly charged consumers hidden fees and misrepresented the total prices consumers would pay and the benefits of the companies’ VIP Support and Price Freeze services.
The FTC’s complaint alleges that despite its “no hidden fees” promises, Canadian company Hopper Inc. and its subsidiary Hopper (USA) Inc., unfairly charged users without their consent for “Tip” and VIP Support fees that the company claimed were optional yet were hidden and pre-selected for consumers.
“Hopper deceived consumers by showing them a total price that did not include hidden, pre-selected fees,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “The Commission will continue to use all available tools to promote price transparency and to combat unfair and deceptive pricing, billing and cancellation practices.”
Hopper allows consumers to search and book airfares, lodging and rental cars primarily through its apps. Until mid-2023, when consumers were ready to purchase their booking, they saw a screen with the “total price” and a Swipe to Book button that allegedly failed to adequately disclose that the company would add charges for Tip and VIP Support fees, according to the complaint. These “optional” fees were pre-selected and hidden on an app screen that only appeared if the consumer scrolled down,
The Federal Trade Commission is seeking public comment on a petition from X Corp., formerly known as Twitter, to set aside or modify its 2022 settlement order with the agency.
According to the federal regulatory agency, in its petition to the FTC, X Corp. cited several reasons why it believes that the order should either be set aside or modified so that it terminates at the end of 2026. The petition argues:
- The order was imposed on a company that no longer exists, that every individual responsible for the underlying failures has left the company and that X Corp. has since built a world-class privacy and data-protection program;
- The order no longer serves any valid regulatory purpose, imposing millions of dollars in needless costs to address obligations and protections already required by domestic and international privacy regimes and industry-recognized frameworks that X Corp. follows;
- Setting aside the order safeguards First Amendment values; and
- Setting aside or modifying the order is critical to advancing American leadership in artificial intelligence.
The public will have 30 days, until July 2, 2026, to submit comments on the petition.
Richard B. Newman is a social media lawyer at Hinch Newman LLP.
Informational purposes only. Not legal advice. This article is not intended to and should not be construed as legal advice. May be considered attorney advertising.
Topics
Archives
About This Blog and Hinch Newman’s Advertising + Marketing Practice
Hinch Newman LLP’s advertising and marketing practice includes two decades successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. As FTC attorneys, the firm possesses superior FTC compliance knowledge and more than 20 years of FTC defense advocacy experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. It has also been selected to author the Consumer Protection Section of the prestigious American Lawyer Media International Federal Trade Commission: Law, Practice and Procedure Treatise, a comprehensive resource for developments of concern to advertisers, marketers and legal professionals that practice before the Commission. Through these advertising and marketing law updates, Hinch Newman LLP provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general advertising compliance, civil investigative demands (CIDs), and administrative/ judicial process.