Ad Law Insights - Legal and Regulatory Updates

Latest FTC and state attorneys general compliance, investigation and enforcement developments of concern to advertisers and marketers

FCC Privacy + Data Protection Task Force Announces Enforcement Partnership with State Attorneys General

By Richard Newman | January 2, 2024
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On December 6, 2023, Federal Communications Commission Chairwoman Jessica Rosenworcel announced a new initiative to strengthen and formalize the cooperation between the FCC and its state partners on privacy, data protection and cybersecurity enforcement matters.

As part of the work of the FCC’s Privacy and Data Protection Task Force, the FCC’s Enforcement Bureau has signed Memoranda of Understanding with Attorneys General of Connecticut, Illinois, New York and Pennsylvania to share expertise, resources and coordinated efforts in conducting privacy, data protection and cybersecurity-related investigations to protect consumers.

The Memoranda of Understanding

           The new MOU affirm that the FCC and State Attorneys General “share close and common legal interests in working cooperatively to investigate and, where appropriate, prosecute or otherwise take enforcement action in relation to privacy, data protection or cybersecurity issues” under sections 201 and 222 of the Communications Act.

Coordinated action and information sharing will take place under all applicable federal and state laws, and privacy protections.

Federal and State Comments

           FCC Chairwoman Rosenworcel said, in pertinent part, that  “[d]efending consumer privacy is an all-of-government responsibility and a shared challenge.  Today we take on evolving consumer threats with new formal partnerships with state law enforcement leaders, which  have already been successful in obtaining record-breaking results in combatting illegal robocalls.”

FCC Enforcement Bureau Chief Loyann A. Egal said, in pertinent part, that “[u]se of information and communications technology and services have significantly enhanced our lives while at the same time increasing vulnerabilities to our privacy and sensitive data. 

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FCC ADOPTS NEW RULE TO CLOSE THE LEAD GENERATOR ROBOCALL AND ROBOTEXTS LOOPHOLE

By Richard Newman | December 14, 2023
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On December 13, 2023, the Federal Communications Commission adopted new rules designed to protect consumers from “scam communications” by directly addressing some of the “biggest vulnerabilities” in America’s robotext defenses and closing the “lead generator” robocall/robotexts loophole.

The new rules allow blocking of “red flagged” robotexting numbers, codifies Do-Not-Call rules for texting, and encourages an opt-in approach for delivering email-to-text messages.

Closing the Lead Generator Loophole

The new rules close a loophole through which “unscrupulous robocallers and robotexters inundate consumers with unwanted and illegal robocalls and robotexts.” The new rules make it unequivocally clear that comparison shopping websites and lead generators must obtain consumer consent to receive robocalls and robotexts one seller at a time – rather than have a single consent apply to multiple telemarketers at once.

Combating Robotext Sources

The new rules allow the FCC to “red flag” certain numbers, requiring mobile carriers to block texts from those numbers. The rules also codify that Do-Not-Call list protections apply to text messaging, making it illegal for marketing texts to be sent to numbers on the registry. And the order encourages providers to make email-to-text messages an opt-in service, which would limit the effectiveness of a major source of unwanted and illegal text messages.

Groundwork for Future Steps

In addition to the rules, the FCC also proposed and will take public comment on additional steps it might take against robotexts. The FCC proposes additional blocking requirements when the FCC notifies a provider of a likely “scam text-generating number.” The FCC will also seek further comment on text message authentication – modeled on the implementation of STIR/SHAKEN protocols for phone calls – including on the status of any industry standards in development.

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Lead Generators and Brokers Beware: Proposed FCC Rule Requires Telemarketing Consent Must be Obtained From a Single Seller at a Time

By Richard Newman | November 25, 2023
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One of the key issues relating to the NPRM pertains to consent being sent directly to/obtained by one seller at a time.

The FCC has now circulated its proposed rule.  It has not been adopted yet but it looks like it will be in December when voted upon.  It looks like the rule will become effective in or around August or September of 2024.

In pertinent part, the FCC ruling would require terminating mobile wireless providers to block all texts from a particular number when notified by the FCC of illegal texts from that number; codify that the National Do-Not-Call Registry’s protections extend to text messages; and close the lead generator loophole by making unequivocally clear that comparison shopping websites must get consumer consent one seller at a time.

Additionally, as amended “prior express written consent” shall be revised to read, as follows:  “The term prior express written consent means an agreement, in writing, that bears the signature of the person called that clearly and conspicuously authorizes no more than one identified seller to deliver or cause to be delivered to the person called advertisements or telemarketing messages using an automatic telephone dialing system or an artificial or prerecorded voice.”  The “seller” is not the a lead generator.  It is the provider of the products or services

Moreover, “calls must be logically and topically associated with the interaction that prompted the consent and the agreement must identify the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.”  “[R]obotexts and robocalls that result from consumer consent obtained on comparison shopping websites must be logically and topically related to that website.  

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FTC Settles With For-Profit College Over Alleged Deceptive Job Placement Claims

By Richard Newman | November 2, 2023
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On October 18, 2023, the Federal Trade Commission announced that it has agreed to a $3.4MM settlement with New Jersey for-profit Sollers College over alleged deceptive ads that lured prospective students into unlawful contracts, purportedly falsely touting relationships with prominent employers and inflating job placement rates.  The charges were brought by the FTC and the state of New Jersey.

According to the FTC’s complaint, Sollers, and its parent company, used their website, social media, and email campaigns to falsely advertise their partnerships with prominent employers in the fields of information technology, clinical research and drug safety.  According to the complaint, Sollers falsely claimed that its partnerships with prominent employers, such as Pfizer, Weill Cornell Medicine, and Infosys, resulted in jobs for its graduates at those companies. Many of the businesses featured on Sollers’ website had no partnership with the school at all, says the FTC.

The complaint states that, since at least 2018, Sollers advertised that the vast majority of Sollers graduates are placed in jobs.  For example, the company purportedly advertised, “90% of our students are placed within 3 months of graduation,” on its website.  In reality, the job placement rate for Sollers graduates is substantially lower than the 80 percent, 82 percent, 90 percent or “near perfect” rates featured prominently on its website and in its advertising campaigns, the FTC states.  According to the FTC, the school’s own data suggests that the current job-placement rate for graduates of its Life Sciences programs remains as low as 52 percent.

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California Passes The Delete Act – What Lead Generators and Data Brokers Need to Know

By Richard Newman | October 13, 2023
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On October 10, 2023, California Governor Gavin Newsom signed the Delete Act (SB 362).  The Act is new legislation that requires businesses that meet the definition of “data broker” to provide detailed disclosures about its practices, register with the state and delete any personal information relating to a California resident upon receiving a verifiable deletion request.

The Act requires the California Privacy Protection Agency to establish a simple deletion mechanism that permits individuals to submit deletion requests that data brokers must adhere to starting August 1, 2026.  Importantly, beginning in 2028 data brokers will be subject to audits intended to demonstrate compliance with the Act.

What Businesses are Covered Under the Act?

The Delete Act defines “data broker” as a business that knowingly collects and sells personal information of a consumer that it does not have a direct relationship with, to third parties.  Excluded are certain entities that may be covered by various federal and state laws relating to data, such as the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act, the Confidentiality of Medical Information Act and the California Insurance Information and Privacy Protection Act.

Data brokers must register with the CPPA and pay registration fees, as well as fees for access to the deletion mechanism.

What are the Applicable Registration and Disclosure Requirements?

Data brokers are required to register with the CPPA on or before January 31 for each year that they meet the statutory definition of “data broker.”  In fact,

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About This Blog and Hinch Newman’s Advertising + Marketing Practice

Hinch Newman LLP’s advertising and marketing practice includes successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman 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. This blog is sponsored by Hinch Newman LLP.

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