Lead Generation
On the eve prior to its effective date, the FCC’s One-to-One Consent Rule which sought to redefine the meaning of “prior express written consent” under the Telephone Consumer Protection Act, was postponed for one year by order of the FCC’s Consumer and Government Affairs Bureau. Just minutes thereafter, the rule was struck down by the U.S. Court of Appeals for the Eleventh Circuit.
Background
The Telephone Consumer Protection Act (TCPA) , in part, requires callers to possess “prior express consent” when making non-emergency telephone calls to cell phones using an automatic telephone dialing system, or artificial or prerecorded voice; and telephone calls to residential telephone lines using an artificial or prerecorded voice (with limited exceptions).
In 2012, the Federal Communications Commission established that the foregoing calls (including SMS text messages) for marketing purposes must have “prior express written consent,” defined as “an agreement, in writing, bearing the signature of the person called that clearly authorizes the 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, and the telephone number to which the signatory authorizes such advertisements or telemarketing messages to be delivered.”
The Federal Communication Commission Government Affairs Bureau Postpones Effective Date of the TCPA One-to-One Consent Rule
On January 24, 2025, the FCC announced that it has postponed the effective date of the one-to-one consent rule. “By this Order,
The Federal Trade Commission is watching the healthcare lead generation industry closely.
On December 10, 2024, the Federal Trade Commission announced that it has sent warning letters to 21 companies that market or generate leads for healthcare plans. The letters were sent as open enrollment season for healthcare plans is ongoing. They provide guidance and provide about deceptive or unfair claims that likely violate laws enforced by the FTC.
The letters were sent to companies that provide marketing or advertising, including lead generation, related to Affordable Care Act Marketplace health insurance and healthcare-related products, such as limited benefit plans and medical discount programs.
The purpose of FTC warning letters is to warn companies that their conduct is likely unlawful and that they can face serious legal consequences, such as a federal investigation of lawsuit, if they do not immediately stop. Overwhelmingly, companies that receive FTC warning letters take steps quickly to correct and come into compliance with applicable legal regulations.
“It is critical for consumers’ health and financial well-being that marketers of health plans be honest about the plans they and their partners are offering,” said FTC lawyer Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC has been watching this important sector closely, especially during open enrollment season, and these warning letters put companies on notice that unlawfully marketing or advertising health plans to consumers can result in serious legal consequences.”
Based on information collected by FTC staff and the agency’s enforcement experience in this area,
As previously blogged about here, following notices of proposed rulemaking in 2022 and 2023, on August 22, 2024 the Federal Trade Commission finalized a rule that will impose monetary civil penalties false and misleading consumer reviews and testimonials. Those covered by the Final Rule, including, but not limited to, advertisers, marketers, manufacturers, brands and various intermediaries, and businesses that promote and assist such entities, should consult with an experienced FTC compliance lawyer and begin to prepare for its enforcement, immediately.
What Does the FTC Final Rule Banning Fake Consumer Reviews and Testimonials Cover?
The FTC Final Rule Banning Fake Consumer Reviews and Testimonials formalizes the prohibition of various practices relating to the use of consumer reviews and testimonials and sets forth which practices may be considered unfair or deceptive pursuant to the FTC Act.
In short, the Final Rule is intended to foster fair competition and protect consumers’ purchasing decisions. In general, the Final Rule covers: (i) the purchase, sale or procuring of fake reviews or testimonials (for example and without limitation, a reviewer that does not exist, a reviewer that did not actually use or possess experience with the product or service, or a review that misrepresents actual experience); (ii) providing compensation or other incentives in exchange for reviews that express a particular sentiment; (iii) facilitating “insider” consumer reviews and testimonials that do not contain a clear and conspicuous disclosure of the relationship; (iv) utilizing websites that appear to be independent review websites when,
On July 23, 2024, the Federal Trade Commission announced the issuance of orders to eight companies offering surveillance pricing products and services that incorporate data about consumers’ characteristics and behavior. The orders were sent to: Mastercard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co.
The orders seek information about the potential impact these practices have on privacy, competition and consumer protection.
The orders are aimed at helping the FTC better understand the opaque market for products by third-party intermediaries that claim to use advanced algorithms, artificial intelligence and other technologies, along with personal information about consumers—such as their location, demographics, credit history, and browsing or shopping history—to categorize individuals and set a targeted price for a product or service.
The study is aimed at helping the FTC better understand how surveillance pricing is affecting consumers, especially when the pricing is based on surveillance of an individual’s personal characteristics and behavior.
“Firms that harvest Americans’ personal data can put people’s privacy at risk. Now firms could be exploiting this vast trove of personal information to charge people higher prices,” said FTC lawyer and Chair Lina M. Khan. “ Americans deserve to know whether businesses are using detailed consumer data to deploy surveillance pricing, and the FTC’s inquiry will shed light on this shadowy ecosystem of pricing middlemen.”
The FTC is using its 6(b) authority, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose,
As previously blogged about here, the Federal Communications Commission recently published the final, single-seller, one-to-one lead generator consent rule (the “Rule”). The Rule amends the definition of “prior express written consent” for purposes of the Telephone Consumer Protection Act and will dramatically impact the lead generation industry.
How Does the New One-to-One, Single Seller Rule Impact Lead Generation?
When utilizing regulated technologies such as automatic telephone dialing systems (“ATDS”), artificial or prerecorded voice telephone calls, artificial intelligence voice telephone calls, outbound interactive voice response, and voicemail technology using artificial or pre-recorded voice messages, consumers will be required to select each “seller” – the ultimate provider – of a product or service from whom they want to receive telephone calls from.
Note that manual dialing may not provide cover, including insofar as telephone numbers on a do-not-call registry and various state legal regulations are concerned.
Further note that single “seller” consent does not encompass lead generators and other intermediaries, with potentially limited exception. Furthermore, it also appears that sharing consent across corporate affiliates will also be considered a Rule violation.
The cost of violating any of the Rule’s provisions are potentially devastating. Plaintiffs’ attorneys will be ready to pounce. Do not attempt to secure compliance on your own. Contact an FTC lawyer to discuss legal regulatory considerations for keeping you and your business from becoming low hanging fruit.
The effective date for the single seller provisions of the Rule is January 2025.
On March 7, 2024, the Federal Trade Commission announced a final rule extending telemarketing fraud protections to businesses and updating the rule’s recordkeeping requirements as a result of developments in technology and the marketplace.
FTC lawyers also announced a proposed rule that would provide the agency with significant new tools to combat tech support scams.
Both actions are part of the FTC’s current review of the Telemarketing Sales Rule (TSR), which includes the Do Not Call Registry (DNC) rules and provisions banning nearly all telemarketing robocalls to consumers.
Importantly, the FTC also affirms the TSR’s prohibitions on robocalls using voice cloning technology.
“Today’s changes provide important new protections for small business and will help ensure that the FTC can take action against deceptive marketers who use AI robocalls and other emerging technology,” said FTC attorney Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We look forward to comments from the public on the additional proposals that would deter tech support scams and aid the Commission’s efforts to put money back into the pockets of defrauded consumers.”
The TSR became effective in 1995 and applies to virtually all “telemarketing” activities, both in the United States and international sales calls to consumers in the United States. The rule generally applies only to outbound calls made by telemarketers to consumers, with some exceptions, and protects consumers in a range of ways.
For example and without limitation,
The Federal Trade Commission Bureau of Consumer Protection welcomes an open dialogue with parties cooperating with its investigations. According to FTC lawyers, such dialogue allows the agency to make more informed decisions on whether to recommend an enforcement action and, if so, whether such an action can be resolved without the need for protracted litigation.
However, the Federal Trade Commission is also mindful of and believes that delays in investigations can undermine the public interest by allowing alleged lawbreaking to continue and by depriving consumers of redress for harms they may have suffered. Consequently, the FTC has made it clear that while substantive engagement is welcome and constructive, the FTC is prepared to pivot more quickly to litigation if undue delay comes at the expense of redress for consumers.
Delay causes particular concern to the agency in matters where the conduct extends beyond the statute of limitations period. In these cases, the FTC’s ability to provide refunds to injured consumers may be barred in whole or in part.
This risk has become more acute following the Supreme Court’s decision in AMG Capital Management, LLC v. FTC, 141 S. Ct. 1341 (2021). Because of AMG, the FTC can no longer seek monetary relief under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), which does not have a statute of limitation. Instead, the FTC must often rely on Section 19, 15 U.S.C. § 57b, which authorizes courts to order defendants to provide redress only when violations occurred within three years of the initiation of the Commission’s action.
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.
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.
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.