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Ellen T. Berge

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Ellen Berge provides counsel on regulatory compliance, government investigations, contract negotiations, and general business matters. Ellen focuses on advertising, marketing practices, payment processing, and merchant services. Her clients include major brand advertisers and direct-response retailers, and lead generators, telemarketers, media agencies, software providers, and others who serve them. On the merchant services side, she leads a practice that works with banks, processors, sales agents, payment facilitators, independent software vendors, and fintech and financial services businesses. Ellen also serves as the firm's managing partner of Professional Development and Recruiting.

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Last week, the Fifth Circuit Court of Appeals held that the Telephone Customer Protection Act (TCPA) permits businesses to obtain only prior express consent rather than prior express written consent for autodialed and prerecorded calls and texts. This holding expressly rejects the Federal Communication Commission’s (FCC) interpretation of the TCPA’s consent requirement first promulgated in 2012.

In Bradford v. Sovereign Pest Control, the Fifth Circuit affirmed the lower court’s grant of summary judgment to the defendant, refusing to apply a stricter consent standard to telemarketing texts than to non-telemarketing or informational messages. In the case, the court rejected the FCC’s long-standing regulation that interpreted the TCPA to require prior express written consent for telemarketing messages, holding that because the TCPA’s statutory text does not distinguish between telemarketing and non-telemarketing/informational messages, courts should not apply a stricter consent standard for telemarketing messages.Continue Reading Fifth Circuit Limits TCPA Prior Express Written Consent Requirements

New York has amended its General Business Law to move beyond a deception-based consumer protection standard and authorize enforcement against unfair and abusive practices, giving the Attorney General materially broader discretion to shape marketplace conduct. The new framework resembles federal UDAAP enforcement in that it relies less on detailed statutory rules and more on evolving enforcement judgments about what constitutes “fair” conduct.

In announcing the amendments to New York GBL § 349 contained in the Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act, Attorney General Letitia James pointed to lending and debt collection practices, fee structures, billing mechanics that complicate understanding, contract terms viewed as exploitative, student loan servicers, car dealers, nursing homes, health insurance companies, and impacts on vulnerable or limited-English-proficient consumers. The statute also expressly recognizes potential harm to small businesses and nonprofits, extending potential exposure beyond traditional consumer relationships.Continue Reading New York Broadens Attorney General Authority and Embraces Enforcement-Driven Regulation

Earlier this month, attorneys general from seven states launched a coordinated inquiry into the rapidly expanding “buy now, pay later” (BNPL) market. Led by Connecticut and North Carolina, and joined by California, Colorado, Illinois, Minnesota, and Wisconsin, the multistate coalition of attorneys general sent letters to six major BNPL providers, outlining concerns that the companies’ products may be violating state consumer protection laws.

Regulators Cite Risks: Repayment Challenges and Transparency Concerns

In the letters, state AGs request information on pricing and repayment structures, as well as copies of consumer contracts, user agreements, and disclosures. The inquiries focus on determining whether consumers have received what the states view as appropriate protections—specifically, whether they have encountered a lack of transparency, undisclosed fees, and risky repayment structures.Continue Reading State AGs Increase Scrutiny of Buy Now, Pay Later Providers Amid Consumer Protection Concerns

Texas’s amended telemarketing registration law takes effect on September 1. Although the law is not new, the legislature expanded it to apply to text messages. Under Texas’s existing law, a company that makes telephone solicitations to or from Texas must obtain a registration certificate for each business location where it makes those telephone solicitations. Until now this requirement applied to outbound calls, but beginning September 1 it will also apply to outbound marketing text messages.

Certain types of entities and telephone solicitation activities are exempt from the registration requirement, such as communications soliciting food sales; soliciting businesses to purchase items for resale; soliciting former or current customers; and telephone solicitations for purchases that will be completed at in-person sales presentations.Continue Reading Compliance Deadline of September 1 for Companies Sending Texts: Telemarketing Registration in Texas

The U.S. Court of Appeals for the Eighth Circuit vacated the Federal Trade Commission’s Rule Concerning Subscriptions and Other Negative Option Plans (often referred to as the “Click-to-Cancel” rule) on July 8, just days before the FTC was set to begin enforcement of the rule.

The decision resolved various consolidated petitions challenging the rule on grounds that it exceeded the scope of the FTC’s authority, was not promulgated in accordance with necessary rulemaking procedures, and was overly broad. The winning argument, though, was that the FTC skipped the critical step of issuing a preliminary analysis of the benefits and effects of the proposed rule and any reasonable alternatives, because it initially failed to treat the rule as “economically significant” to the national economy.Continue Reading Eighth Circuit Cancels FTC Negative Option Rule: What Does It Mean?

In a development that underscores the Federal Trade Commission’s (FTC) growing scrutiny of the “merchant of record” model, the commission announced a $5 million settlement with UK-based Paddle.com Market Limited (Paddle), which processed payments for multiple businesses that allegedly sold deceptive tech support software subscriptions to U.S. consumers. The Paddle settlement, which follows a series of earlier actions involving merchants of record, suggests that the FTC has expanded its focus from the traditional payments industry to more novel models that support merchant aggregation and related services. The settlement also presents another novel use of the FTC’s authority under the Restore Online Shoppers’ Confidence Act (ROSCA), which has become a favored tool of the FTC in policing sales and recurring billing practices that the commission deems unfair or deceptive.

FTC Allegations and Merchant of Record Concerns

Over the past decade, global e-commerce has grown dramatically, with merchants selling goods and services to consumers around the world. Given the complexity of cross-border sales, many e-commerce merchants have partnered with payments companies that process sales for the merchant as the “merchant of record,” and which may provide other ecommerce services, such as sales fulfillment and tax remittance. Although the merchant of record model has grown in popularity, the concept is not expressly recognized by the card network rules, which generally require merchant aggregators to register as payment facilitators.Continue Reading FTC Targets “Merchant of Record” for Unlawful Payment Processing, TSR, and ROSCA Violations

On Friday, ​the Federal Trade Commission voted to defer the compliance deadline for the amended Negative Option Rule by 60 days. The Commission issued a statement on the new deadline.

The delay reflects the FTC’s response to various commenters who expressed concern that, “given the complexities” of these provisions, it would take a substantial…

Ending speculation and uncertainty about whether new leadership at the Federal Trade Commission (FTC) would repeal or continue to defend the agency’s Negative Option Rule, which regulates offerings such as autorenewal of subscription services, this week the agency filed a brief at the Eighth Circuit defending the rule—something of a surprise.

We previously discussed the arguments raised by industry groups that are challenging the rule. Broadly, the challengers assert that the rule exceeds the FTC’s statutory authority, is procedurally defective, and is arbitrary and capricious. The Eighth Circuit previously denied petitioners’ request to stay the rule from taking effect pending litigation.Continue Reading FTC Files Brief Defending “Click to Cancel” Negative Option Rule

This week, the Federal Trade Commission (FTC) issued its long-awaited Final Rule on Unfair or Deceptive Fees. When the FTC released the proposed rule over a year ago, the rule covered any business that offered goods or services for sale. The Commission largely narrowed the rule’s application, which now focuses on live-event tickets and short-term lodging (defined as a hotel, motel, inn, short-term rental, vacation rental, or other place of lodging).

The Final Rule also covers third-party travel service providers, including online travel agencies and travel advisors. The FTC did not shed much light on its reasoning, but Republican Commissioner Melissa Holyoak’s concurring statement on the overly broad scope of the earlier version provides some indication of an effort to make the rule more palatable to the incoming Congress, which could repeal the rule through the Congressional Review Act.Continue Reading FTC Issues Scaled-Back Final Fee Rule Targeting Live-Event Tickets and Short-Term Lodging

As we previewed last week, industry and trade groups wasted no time in filing challenges against the Federal Trade Commission’s (FTC) Final Negative Option Rule.

The Michigan Press Association and the National Federation of Independent Businesses filed a petition challenging the rule in the Sixth Circuit Court of Appeals, while a separate petition was filed by multiple trade associations in the Fifth Circuit. Both cases have asked federal courts of appeals to determine whether the FTC’s issuance of the rule exceeded the agency’s authority and if the FTC’s processes were arbitrary, capricious, and an abuse of discretion under the Administrative Procedure Act. The petitions also ask the courts to determine if the FTC complied with the agency’s Magnuson-Moss rulemaking requirements, claiming the rule was “unsupported by substantial evidence” and based on determinations that did not allow for consideration of “disputed material facts.”

The petitions request that the courts vacate and set aside the rule. If either petition is granted, the FTC will not be able to enforce its Negative Option Rule.

Additional challenges to the FTC’s Negative Option Rule might continue. And similar challenges against FTC rules have found success; for example, the FTC’s Non-Compete Rule was set aside and ruled unenforceable nationwide. That decision is currently on appeal at the Fifth Circuit.Continue Reading Business Groups Rush to File Federal Court Challenges to the FTC’s Negative Option “Click-to-Cancel” Rule