FTC Amends Telemarketing Sales Rule: Amendments Include a Ban on the Use of Certain Payment Mechanisms in Telemarketing and Clarification on Existing Provisions, Including the Business-to-Business Call Exemption

Last week, the Federal Trade Commission (FTC) released new amendments to the Telemarketing Sales Rule (TSR) that the FTC first proposed in July 2013 and that will go into effect in 2016.  As expected, the new amendments make a number of substantial changes, including a ban on the use four types of payment methods in telemarketing.  It also clarifies certain issues relating to the FTC’s Do Not Call enforcement policies and their application to business-to-business calls, demonstrating the existence of an “established business relationship,” and the sharing of the cost of Do Not Call (DNC) Registry fees.  Continue Reading

FTC Keynote at BAA Conference: Outpacing Zombies in Today’s Digital Marketplace

FTC Deputy Director Daniel Kaufman launched into his keynote address at this year’s BAA marketing law conference by comparing the modern digital marketplace to the most talked about TV series as of late: The Walking Dead.  He pointed out that the show has spawned active social media engagement and user generated content (#GlennIsAlive…or is he?), produced several apps, and at times blurred the line between content and advertisement by featuring sponsored products in its episodes.  As exciting as this digital revolution may be, however, Mr. Kaufman made clear that the fundamental principles of consumer protection still apply to today’s marketplace: tell the truth; prominently disclose any facts necessary to make sure your claims aren’t misleading; carefully consider whether your business decisions may result in any consumer harm; and don’t help others deceive or harm consumers.  These principles are timeless, stated Mr. Kaufman, and the FTC expects companies to abide by them across all of their business models, both old and new.

To keep pace with the digital revolution, Mr. Kaufman noted that the FTC has spent significant resources developing tools and bringing enforcement actions that address important concerns about emerging technologies, such as:

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“Show Me” State Shows No Mercy: Missouri AG Files Suit Against Charity Telemarketers

On October 27, 2015, the Missouri Attorney General filed a lawsuit against two telemarketing companies that solicit donations on behalf of charitable organizations in the state, and against the companies’ co-owners.  Regular readers of this blog know that these have been very eventful times for telemarketers, as the U.S. Supreme Court considers the breadth of relief to which a plaintiff is entitled under the Telephone Consumer Protection Act (“TCPA”), other federal courts opine on the definition of an “autodialer,” and the Federal Communications Commission releases consumer complaint data weekly.

Missouri’s action is not simply an example of piling-on: it is a stark reminder that telemarketers who work for nonprofit organizations must still comply with many of the TCPA’s provisions (as well as those of the TCPA’s cousin, the Telemarketing Sales Rule (TSR)).  Some businesses that operate in the nonprofit sector – particularly the charity sector – believe that laws impacting the commercial industry do not similarly apply to them; this can be a costly mistake.  Continue Reading

Do You Have to Take “Yes” for an Answer? The Supreme Court Takes Another Look at Mootness Following an Offer of Judgment in TCPA Class Litigation

The Supreme Court wrestled with a thorny question on October 14, 2015 when it heard oral argument in Campbell-Ewald Co. v. Gomez, a case that we previewed previously.  The transcript of the oral argument is available here.

The facts in Campbell-Ewald are straightforward.  The plaintiff sued Campbell-Ewald, a U.S. Navy contractor hired to provide “multimedia recruiting campaign” services, under the Telephone Consumer Protection Act (“TCPA”) after he received an unsolicited text message from Campbell-Ewald in 2006.  Campbell-Ewald admitted fault and, pursuant to Fed. R. Civ. P. 68, offered a full settlement of $1,503 to the plaintiff, slightly more than three times the maximum award allowed under the TCPA.  But, there is a wrinkle – the plaintiff refused the offer of judgment.  That brings us to the Supreme Court, which is considering the following question: “Does a case become moot when a plaintiff receives an offer of complete relief for his claim?”

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Under the Influence

As Uncle Ben once said, “With great power comes great responsibility.”  But Peter Parker had to learn the hard way, and marketers and social influencers sometimes need to as well.  Well-known influencers can come from anywhere – some have big screen starts, others are video game superstars, and still others are makeup geeks.  Some even started out as bloggers (fingers crossed).  As the compensation of social influencers increases, however (YouTube channel Itsbabybigmouth reportedly makes between $567,000 and $9 million  for its YouTube channel that features opening candy eggs to reveal the surprise toys inside), influencers – and the marketers and advertisers who engage them – face ever-greater scrutiny by regulators.

Earlier this month, at the NAD Conference, Commissioner Brill emphasized the importance of disclosures surrounding endorsers and indicated that social influencers would be a hot topic of enforcement.

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Postscript to Luna v. Shac LLC: Human Intervention Still Precludes Finding That Strip Club’s Dialing Platform Constitutes an Autodialer Under the TCPA

Last month, we blogged about the U.S. District Court for Northern District of California’s recent decision entered in Luna v. Shac, LLC, — F. Supp. 3d –, No. 14-cv-00607 (N.D. Cal. Aug. 19, 2015), which awarded summary judgment to the defendant-gentleman’s club in a Telephone Consumer Protection Act (“TCPA”) class action.  You can read that post here.  In short, the court held that the defendant’s dialing/texting platform did not constitute a prohibited autodialer under the TCPA in the wake of the FCC’s July 2015 omnibus TCPA Order – i.e., (1) adding numbers to a database (either by manually typing the phone numbers, or by uploading or cutting-and-pasting from an existing list of number); (2) drafting the content of the text messages for each campaign; and (3) selecting the numbers to call and clicking “send” (one-click) to transmit the messages–because of the level of human intervention in dialing. Notably, summary judgment briefing in Luna wrapped up before the FCC Order was released, but the plaintiff noticed the Order as supplemental authority in opposition to the defendant’s motion for summary judgment. The defendant responded explaining why the FCC Order did not pose an obstacle to summary judgment.  The court also cited the Order in its decision. Continue Reading

“There’s a Storm Coming, Mr. Wayne” – FCC Decides to Release Robocall and Telemarketing Consumer Complaints

By  charlieanders2 [CC BY-SA 2.0 via flickr]

By charlieanders2 [CC BY-SA 2.0 via flickr]

In the most recent installment of the Batman movie franchise, The Dark Knight Rises, Anne Hathaway’s character, Selina Kyle, whispers ominously into Bruce Wayne’s ear, “There’s a storm coming, Mr. Wayne.  You and your friends better batten down the hatches . . .”  Hathaway was forecasting the onslaught of villains who, shortly thereafter, stormed Gotham and wreaked havoc.  On October 21, 2015, the FCC issued a press release putting telemarketers on notice that a similar Telephone Consumer Protection Act (“TCPA”) storm, indeed, is coming their way.

More specifically, the FCC announced that it will release the robocall and telemarketing consumer complaint data it receives on a weekly basis, ostensibly “to help developers build and improve ‘do-not-disturb’ technologies that allow consumers to block or filter unwanted calls and texts.”  The ramifications of the release of: (i) advertiser’s business telephone number; (ii) caller ID number; (iii) whether the recipient received an autodialed call or prerecorded message; and (iv) whether the call was abandoned, among other things, are obvious.  Such data is a treasure trove for the plaintiffs’ bar, and there will likely be a significant uptick in TCPA class action complaint filings across the country.

Despite the FCC’s admission that it “does not verify all of the facts alleged in these complaints,” that surely will not deter the filing of many class actions.  Telemarketers should ensure that their telemarketing compliance programs are strong, but still batten down their hatches and brace for the storm that may be coming their way.

Your Social Media Policy, the FTC and the DOL

When your employees “speak” in social media, using their personal social media accounts, what they “say” may interest at least two different federal agencies with different agendas.  The Federal Trade Commission (FTC) regulates endorsements your employees may make related to their employment, while the Department of Labor (DOL) enforces the labor law that entitles employees to communicate with each other about terms and conditions of their employment.  To avoid potential problems with the FTC and DOL, you should have a social media policy that addresses both interests.  Continue Reading

Consensus Among FTC Commissioners on Green Claims Appears To Be Biodegrading

On Monday, the FTC Commissioners issued an opinion and Final Order, finding that ECM BioFilms, Inc. (“ECM”) made false, misleading, and unsubstantiated environmental claims about its chemical additive product.  According to the FTC’s Complaint filed in October 2013, ECM’s advertisements and marketing materials claimed its product would cause plastics using its additive to: (i) biodegrade in a landfill within nine months to five years; and (ii) make the product biodegradable.  The Complaint also alleged that ECM made deceptive establishment claims and that ECM provided the means and instrumentalities to its customers to make deceptive statements to consumers about finished products.  We’ve written previously about similar challenges to biodegradability.  What makes this opinion notable is the disagreement among the Commission about what claims can be inferred from an unqualified claim that a product is biodegradable, the reliability of a relatively new survey methodology, and what the “significant minority” language in the FTC’s Policy Statement on Deception (the “Deception Statement”) means in the context of extrinsic evidence.

In its opinion, the Commission affirmed Chief Administrative Law Judge D. Michael Chappell’s Initial Decision that ECM made deceptive biodegradability claims that plastics treated with its additive will completely biodegrade within nine months to five years and that ECM encouraged its customers to pass on these deceptive claims to consumers.  However, upon its own examination of the evidence, the Commission reversed the ALJ and held that ECM also made implied claims that were false and unsubstantiated regarding how plastics treated with ECM’s product will biodegrade within a reasonably short period of time, or within one to five years by making a general biodegradability claim.  The ALJ had found that the FTC failed to produce sufficient extrinsic evidence that ECM’s marketing made such implied claims.  Continue Reading