All About Advertising Law

Regulatory & Litigation Developments for Advertisers and Marketers

“Tie Me Up! Tie Me Down!”: Second Circuit Rules That Parties May Contractually Agree that TCPA Consent is Not Revocable

By Daniel S. Blynn on June 26, 2017

Can a seller contractually prohibit a customer from revoking his or her consent to receive autodialed and/or pre-recorded message calls under the Telephone Consumer Protection Act (TCPA)? According to the U.S. Court of Appeals for the Second Circuit, the answer is “yes.” On June 22, 2017, in Reyes v. Lincoln Automotive Financial Services, No. 16-2104 (2d Cir. June 22, 2017), a first-of-its-kind decision, a three-judge panel of the U.S. Court of Appeals for the Second Circuit unanimously affirmed a district court’s award of summary judgment to defendant Lincoln Automotive Financial Services on the plaintiff’s TCPA claim, which alleged that Lincoln violated the Act by placing autodialed and pre-recorded message calls to the plaintiff’s cell phone without appropriate consent.

The underlying facts were relatively straightforward: in 2012, the plaintiff leased a new car; Lincoln financed the lease. The lease contained a provision, to which the plaintiff assented, stating:

You [plaintiff] also expressly consent and agree [that Lincoln] may use written, electronic or verbal means to contact you. This consent includes, but is not limited to, contact by manual calling methods, prerecorded or artificial voice messages, text messages . . . and/or automatic telephone dialing systems. You agree that [Lincoln] may use . . . any telephone number you provide, now or in the future, including a number for a cellular phone or other wireless device, regardless of whether you incur charges as a result.

Supreme Court Strikes Lanham Act’s Disparagement Clause; Near-Term Effect Uncertain in Light of Other Viewpoint Based Prohibitions

By Susan Hollander and Paul Sousa on June 22, 2017

The U.S. Supreme Court ruled unanimously on June 19, 2017 that the Lanham Act’s disparagement clause prohibiting federal registration of “disparaging” trademarks unconstitutionally limits free speech in a case involving a band named “The Slants.” The near-term effect on trademark applicants, however, is in question due to other viewpoint based prohibitions that were not ruled upon.

In this 8-0 decision, the U.S. Supreme Court found in favor of Simon Tam, the front man for Asian-American rock band The Slants, who had been denied a trademark because the U.S. Patent and Trademark Office deemed the name disparaging to people of Asian descent. The rock band challenged the denial as a violation of free speech rights under the First Amendment.

The End of the #ad? A Turning Point for Branded Content on Social Media

By Melissa Landau Steinman and Amy Mudge on June 19, 2017

It is no secret that influencer marketing—in which social media influencers have the ability to engage with their followers and create “organic” content about a particular product or service—is a huge asset for companies. It is also no secret that advertisers, agencies and influencers alike are often confused about how to comply with the FTC’s Guides Concerning the Use of Endorsements and Testimonials. While the FTC has attempted to clarify its position in subsequent FAQs and enforcement actions—and, most recently, in a “sweep” of “educational” letters we blogged about in April—it’s become increasingly clear that when and how to disclose might never be clear-cut. But it might be getting clearer, with some help from the social media platforms. Below are examples of how such platforms are taking new steps to address how branded content is disclosed:

It’s Not a Small World, After All, for Sweepstakes: Lessons Learned from International Sweepstakes

By Melissa Landau Steinman and Michael S. Isselin on June 16, 2017

medal winner And the big “winner” is (drumroll) … the Italian Competition Authority. A multinational electronics company was a most recent victim of the stringent Italian prize promotion regulations — to the tune of € 3.1 million (or roughly US$3.37 million). The costly sanctions were imposed on the company by Italian authorities for, among other issues, unfair commercial practices. The authorities challenged the execution of some of the company’s promotions, claiming that the advertising for the promotions did not include clear and sufficiently visible explanations of how to win the prize, in violation of Italian customary commercial practices, and that the sponsor’s requirement that the winner must register and provide personal information in order to win the prize was in violation of Italian law as well. And the issues highlighted above are just some of the parameters a marketer needs to consider when running a successful sweepstakes in Italy, from a notary requirement to the need for a VAT (“value-added tax”) representative for non-Italian sponsors to the need for compliance with Italian privacy laws. The combination of these issues provided the perfect backdrop for an enforcer to make an example out of the multinational company’s marketing efforts, and gives us the perfect opportunity to remind companies to be diligent when running international promotions while we alert our base to these complex foreign issues.

Student Loan Market in FTC’s Cross Hairs

By Leonard Gordon and Alexandra Megaris on May 31, 2017

Lots of folks were wondering whether at the Federal Trade Commission (FTC) it was “School’s Out” with a shortage of Commissioners and a new administration in the White House. A recent case involving the telemarketing of student loan debt relief services makes clear that, at least in certain areas, school is still in session. The case also highlights the growing regulatory scrutiny on the student loan space.

In obtaining a temporary restraining order shutting down a group of related companies, the FTC alleged that in “many instances,” the companies failed to deliver any of the promised services. Specifically, according to the FTC, the defendants collected upfront and monthly fees in exchange for enrolling consumers in student loan forgiveness or income-driven repayment programs and to improve consumers’ credit scores. The FTC found that many consumers received no services and many went into further debt.

Digital Media Link, May 2017 – A Focus on Augmented and Virtual Reality

By Po Yi, Kimberly Culp, Tamany Bentz, Shannon Yavorsky, Andrew E. Bigart, Evan Minsberg and Michael S. Isselin on May 26, 2017

In the most recent edition of Digital Media Link, we explore the legal issues surrounding new technologies, with a particular focus on augmented and virtual reality. As we have seen time and again, new technologies do not necessarily mean new statutes or case law, which usually are slow to catch up. What is a lawyer to do, then, when advising on the legal issues associated with these new technologies? We do what we were trained to do – apply the existing rules and precedents to the best of our ability, use our knowledge of the technology and these laws to project how the law will develop, and track developments as they occur. Virtual reality and augmented reality remain so new – at least from the perspective of legal jurisprudence – that we are still in the stage of applying established rules and precedents to these up and coming technologies. In the articles that follow, we take a look at several different legal issues related to these new technologies.

Please click here to read the full issue.

How Many Calls Does it Take to Get to the Center of a TCPA Claim?

By Stephen R. Freeland on May 25, 2017

The answer is that it may depend on where your case is filed. Some courts have said one may be enough. But, according to two recent decisions from New Jersey, one is not enough (sometimes) and neither is three, at least under the factual scenarios alleged in those cases.

In Zemel v. CSC Holdings LLC, the District of New Jersey held that three text messages allegedly sent to the plaintiff using an autodialer without his prior express consent were insufficient to establish standing under the Telephone Consumer Protection Act (TCPA). There, defendant allegedly sent plaintiff an autodialed text message indicating that his mobile number was recently added to a particular service and inviting plaintiff to “Send STOP to opt out, HELP for info.” Plaintiff initially responded “Help” and received a response directing him to visit the defendant’s website for information. Plaintiff, thereafter, texted “Stop,” and received a response asking him to identify the type of messages – service alerts or appointment alerts – that he no longer wished to receive. Plaintiff alleged that these three text messages violated the TCPA and caused him to suffer “actual harm, including aggravation, nuisance, and invasion of privacy that necessarily accompanies the receipt of unsolicited text messages.”

Spinning Gold Into Straw: FTC Obtains a Court Order Requiring the Sale of Defendant’s Home

By Leonard Gordon on May 24, 2017

gold bars Some marketers move to Florida believing that the state’s constitutional Homestead Act protects their house from the Federal Trade Commission’s (FTC) grasp. A recent case shows that the FTC may not share that belief, and a federal judge recently agreed with the FTC.

Sam J. Goldman tried looking for gold, but it didn’t pan out. In 2011, the FTC charged Goldman and others with violating the FTC Act and the FTC’s Telemarketing Sales Rule in connection with selling precious metal investments. Specifically, the FTC alleged that the defendants promoted a bogus investment scheme that conned consumers into buying precious metals on credit without clearly disclosing significant costs and risks. Subsequently, at the FTC’s request, a federal judge ordered a stop to the defendants’ deceptive practices, froze the defendants’ assets, and appointed a receiver to oversee the business. In 2012, the defendants agreed to a $24 million settlement with the FTC to resolve the matter. The judgement was not suspended. So the FTC sought to collect on same.

Consumer Financial Services Practice Digest

By Andrew Arculin, Allyson Baker, Jonathan Pompan, John Banghart, Alexandra Megaris, Jami Vibbert, Peter Frechette, Andrew Hernacki, Evan Minsberg, Katherine Lamberth and Jennifer Talbert on May 19, 2017

cash and credit cards A circuit split regarding the SEC’s administrative law judges, an internal CFPB playbook and memo on their examination process, and a recent field hearing on small business lending are at the forefront of the May 18 edition of Venable’s Consumer Financial Services Digest.

In this issue, we highlight the circuit split between the Tenth Circuit and the D.C. Circuit regarding the status and appointment of the SEC’s administrative law judges.

We take a look at the CFPB’s Examination Playbook, revealing how key decisions are made throughout the examination process.

We provide an analysis on the CFPB’s field hearing on small business lending, including its goal to create a small businesses financing project.

We discuss how to minimize your risks following the recent ransomware cyberattacks.

Continue reading to review the Digest. You will also find a list of upcoming industry events you may be interested in attending.

Ransomware Cyberattacks: How to Minimize Your Risks

By John Banghart and Jami Vibbert on May 18, 2017

On Friday, an unprecedented cyberattack affected a large number of Microsoft Windows-based computers through a type of malware known as ransomware. Although ransomware has been increasingly prevalent over the last few years, this particular version, called “WannaCry,” spread quickly and widely around the world. Many believe that the cyberattack will continue.

Ransomware is generally spread via email messages that contain infected attachments. When a user opens the attachment, a program runs that encrypts the user’s computer and demands a ransom be paid, typically in bitcoin, for a key that will unencrypt the files. In this case, the attackers are asking for between $300 and $600 to unlock the files.