Lead Generation

Three Things Lead Generators Need to Know About the FCC New One-to-One Consent Rule

By Richard Newman / June 22, 2024
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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. 

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FTC Implements New TSR B2B Rules and Proposes Rulemaking on Tech Support Scams

By Richard Newman / March 8, 2024
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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,

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How the FTC Uses Tolling Agreements During Civil Investigative Demand Investigations

By Richard Newman / March 2, 2024
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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.

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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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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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FTC and FCC Renew Memorandum of Understanding to Promote Cross-Border Law Enforcement Efforts to Combat Spam, Scams and Illegal Telemarketing

By Richard Newman / September 27, 2023
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On September 21, 2023, the Federal Trade Commission announced that it has joined the Federal Communications Commission in signing a renewed memorandum of understanding (MOU) between public authorities who are members of the Unsolicited Communications Enforcement Network (UCENet).  The MOU aims to promote cross-border collaboration to combat unsolicited communications, including email and text spam, scams, and illegal telemarketing.

“The FTC is committed to using all of its tools to fight robocalls and other unsolicited communications that try to prey on consumers,” said FTC attorney and Chair Lina M. Khan.  “This scourge does not respect borders, and our recommitment to this MOU underscores the importance of international communication and cooperation to combat this problem.”

UCENet members agreed to renew and make evergreen the MOU, a non-binding instrument which the FTC and its partners signed in 2016.

The 2016 MOU was aimed at facilitating information sharing, capacity building, and enforcement assistance among the partners.  For the past seven years, it also has facilitated communication about emerging threats and complaint trends related to spam, scams, and illegal telemarketing.

The UCENET MOU is part of the FTC’s continuing to work to fight harms that can arise from unwanted messages.  According to the announcement, unsolicited communications in the form of illegal and spoofed robocalls, text messages, and emails are often the source of scams that harm millions of consumers in the United States each year.  The revised MOU also has been signed by UCENet partners in Canada,

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Richard B. Newman Quoted in Cybersecurity Law Report on FTC’s Xbox and Alexa COPPA Case Lessons

By Richard Newman / June 26, 2023
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FTC advertising compliance and defense attorney Richard B. Newman was recently quoted in an article for Cybersecurity Law Report titled “Xbox and Alexa COPPA Case Lessons: Avatars, Biometrics and Other New Expectations.”

The article discusses the FTC’s recent privacy enforcement run and how it reinforces regulators’ expanding expectations for companies using video and audio recordings, smart devices and AI.  The article further discusses recent agency settlements with Microsoft, Amazon and educational technology provider Edmodo that drew $51 million in penalties, broke new ground on the Children’s Online Privacy Protection Act Rule enforcement and signaled new expectations for all companies’ privacy compliance.

In discussing how COPPA is a tool for financial penalties and how these cases highlight the value of COPPA enforcement to the FTC versus its Section 5 authority under the FTC Act, Mr. Newman noted that “[i]n Amazon, obviously, the $25‑million settlement amount leaps out” for Alexa’s improper retention of voice recordings in violation of COPPA.

Mr. Newman further shared that “not just the FTC, but state attorneys general are becoming increasingly interested in expanding regulation of the use and sharing of consumer data, including geolocation data.”

While the FTC contests the issue at the federal level, data brokers and those that interact with them should expect that the plaintiffs’ class action bar and state AGs may lodge claims under state “little FTC acts” that echo the FTC’s July 2022 statement about geolocation data or the biometric one,

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Florida Enacts Comprehensive Privacy Law

By Richard Newman / June 25, 2023
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Florida has become the latest state – approximately ten – to enact a comprehensive privacy law.  On June 6, 2023, Governor DeSantis recently signed SB 262 which includes some new privacy provisions.  Florida also recently passed a child privacy law that is notably similar to California’s Age Appropriation Act that becomes effective July 1, 2024.

The Florida Digital Bill of Rights Law

Covered entities (“controllers”) include those that earn $1 billion in global gross annual revenues and either (i) receive 50% of gross annual revenue from online ad sales; (ii) operate a consumer smart speaker and voice command service with an integrated virtual assistant through a cloud-connected service and hands-free verbal activation; or (iii) operate an app store or digital distribution platform that has at least 250,000 apps available for download.

Note, however, that non-covered entities that serve as data processors for covered entities may potentially be impacted.  More specifically, such processors are required to support a covered entities’ compliance efforts and to maintain responsible contracts that include provisions governing data processing.  In fact, the new law sets forth specific requirements that must be included in such data processing agreements.

Not unlike other states, the Florida Digital Bill of Rights Law has numerous exemptions and applies to consumer information.  Exemptions include entities covered by HIPAA (and business associates), financial institutions and affiliates (subject to GLBA), non-profits, certain government entities, and higher education institutions.  There are also specific data exemptions.

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FTC Reevaulates Green Guides and Pending Civil Penalty Implementing Rulemakings

By Richard Newman / June 4, 2023
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On May 23, 2023, the Federal Trade Commission hosted a national workshop designed to consider the current state of recycling practices and recycling-related advertising.

This follows an FTC announcement in December 2022 that the agency was seeking public comment on potential updates and changes to its ‘Green Guides’ for the use of environment marketing claims.  The Green Guides help marketers avoid making environmental marketing claims that are unfair or deceptive under Section 5 of the FTC Act.

Updates to ‘Green Guides’

In December 2022, the FTC announced that it would seek public comment on potential updates to its “Green Guides” for the use of environmental marketing claims.  FTC attorneys seek to update the Green Guides based on increasing consumer interest in buying environmentally friendly products.  The comment period was extended through April 24, 2023.

“Consumers are increasingly conscious of how the products they buy affect the environment, and depend on marketers’ environmental claims to be truthful,” said FTC lawyer and Bureau of Consumer Protection Director Samuel Levine.  “We look forward to this review process, and will make any updates necessary to ensure the Green Guides provide current, accurate information about consumer perception of environmental benefit claims.  This will both help marketers make truthful claims and consumers find the products they seek.”

The Green Guides were first issued in 1992 and were revised in 1996, 1998, and 2012.  They provide guidance on environmental marketing claims, including how consumers are likely to interpret particular claims and how marketers can substantiate these environmental claims to avoid deceiving consumers. 

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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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