Photo of Jonathan L. Pompan

Jonathan Pompan is co-chair of the firm's Consumer Financial Services Practice Group and Consumer Financial Protection Bureau (CFPB) Task Force. Jonathan's practice focuses on providing comprehensive legal advice and regulatory advocacy to a broad spectrum of clients, such as nonbank financial products and services providers, advertisers and marketers, and trade and professional associations, before the CFPB, the Federal Trade Commission (FTC), state attorneys general, and regulatory agencies. At a time when government consumer protection agencies are stepping up their scrutiny, Jonathan develops strong and lasting relationships with clients by understanding their business objectives, helping them recognize opportunities and avoid legal pitfalls.

Financial services advertising and marketing occurs in an increasingly regulated and evolving legal landscape.  This quick hit with attorneys from Venable LLP explored the latest legal trends and developments in financial services advertising and marketing. Topics included:

  • COVID-19 impact on consumer and business lending advertising;
  • lead generation, influencer, and other emerging marketing methods;
  • regulatory outlook

A major point-of-sale financing and leasing company and the Federal Trade Commission (FTC) have reached a proposed settlement to resolve an investigation into whether the company’s practices and representations to retail consumers violated the FTC Act. The announcement of the settlement highlights the importance of disclosing all material pricing terms to consumers, including in an e-commerce environment and, for point-of-sale financing companies, reviewing and synchronizing their promotional messages with retail partners. The settlement also revealed disagreements among the Commissioners on issues of individual liability and the proper measure of monetary relief.

The settlement resolves an investigation into Aaron’s, Inc. and its wholly owned subsidiary, Progressive Leasing (Progressive), regarding disclosures related to lease-to-own and other financial products. Under the proposed agreement, which remains subject to the approval of the United States District Court for the Northern District of Georgia, Progressive would make a payment of $175 million to the FTC and enhance certain of its compliance-related activities, including monitoring, disclosures, and reporting.

Continue Reading FTC Settlement Underscores Importance of Pricing Disclosures for Lease-to-Own Companies

Venable attorney Jonathan Pompan joined LeadsCon’s Warren Pickett on the LeadsCon Industry Insider podcast episode, “Lead Generation Compliance and Regulation in Today’s World. Who’s Minding the Store?” to discuss current lead generation advertising compliance issues. With government, the private sector, and the daily news cycle engulfed by all things related to COVID-19, speakers discussed amongst

The staff of the Federal Trade Commission’s (FTC) Bureau of Consumer Protection released a much-anticipated paper on small business financing that highlights enforcement dangers on February 26, 2020. The staff are sounding the alarm on FTC enforcement and its investigations of small business financing providers and their marketers, servicers, and collectors.

Continue Reading FTC Staff Perspectives on Small Business Financing Enforcement Dangers

Originally posted on Venable.com

Household and credit card debt is at an all-time high. So it should come as no surprise that debt-relief legal and regulatory issues are back in the spotlight. The Consumer Financial Protection Bureau (“CFPB”) will host “Evolutions in Consumer Debt Relief” on March 10, 2020. The CFPB says the event will explore options for consumers facing unmanageable unsecured debt and limited credit options.

Generally speaking, debt relief services are any program or service that offers to change the terms of a debt between a person and one or more creditors or debt collectors, including a reduction of the loan balance, interest rate, or fees owed. Different kinds of companies may promote or offer to assist consumers in obtaining relief from different kinds of debt, including credit card debts, home mortgages (referred to by the CFPB and Federal Trade Commission (“FTC”) as Mortgage Assistance Relief Services or “MARS”), student loans, payday loans, car loans, or tax debts. There are also different kinds of debt relief services, including credit counseling, debt management plans, debt settlement, debt negotiation, foreclosure prevention, or loan modification.

Debt relief services have long been one of the most highly regulated sectors in the United States, based on the role that the providers play in assisting consumers who by definition are in financial distress. Debt relief services are also provided against a backdrop of contractual obligations of consumers to their creditors to repay amounts owed, and laws and regulations that govern creditors and their collection activities.

Continue Reading Debt Relief Services Back in the Spotlight

Law enforcement, workshops, and reports from the Federal Trade Commission (FTC) have yielded five “lessons” for lead generation advertisers, according to an article that was published last month in Law360 by Andrew Smith, director of the FTC Bureau of Consumer Protection. In it, he suggests that companies that purchase lead generation advertising must manage lead generators responsibly, just like manufacturers that make supply chain management a top priority.

The article drew attention from members of the lead generation advertising sector and their lawyers and compliance departments. Some commentators called it a tutorial on how to reduce risk in using lead generation advertising. For others the article was a cautionary tale of recent enforcement actions taken against a buyer of lead generation advertising and the lead generators spotlighted in the article. In any event, the article was certainly reflective of the FTC’s work in the lead generation area and reminder of the importance of legal compliance in the lead generation ecosystem.

According to Smith: “The complexity of the lead generation ecosystem isn’t a shield against liability, nor does it exempt you from honoring fundamental consumer protection principles. Advertisers should take the lead in ensuring the leads they use weren’t the product of deception.”

Continue Reading Five “Lessons” for Lead Generation Advertisers

In two recent decisions, federal district courts have dismissed at least some of the claims brought by federal and state authorities, finding the complaints insufficiently specific in alleging that a defendant’s conduct met the relevant statutory requirements and/or insufficiently clear regarding their allegations as a whole. These rulings may provide a useful roadmap for future challenges to complaints brought by federal and state regulatory agencies and/or attorneys general.

Federal Trade Commission and People of the State of New York, by James, v. Quincy

We’ve blogged previously about the FTC and State of New York’s challenge to the advertising for cognitive supplement Prevagen. If your memory is good, you will recall that Judge Stanton dismissed the case, but the Second Circuit reversed on the issue of whether the studies Prevagen mentions in its ads support the claims in its ads. In addition to the product manufacturer and marketer, Quincy Bioscience, LLC, Prevagen, Inc., and Quincy Bioscience Manufacturing, LLC, the government also named as defendants Quincy’s co-founders and two largest shareholders, Mark Underwood and Michael Beaman.

Continue Reading Of Specificity and Shotgun Pleadings: Southern District of New York and Southern District of Florida Toss Claims Lacking Sufficient Specificity and Clarity

A bipartisan, public/private coalition of 51 attorneys general and 12 phone companies have agreed to create the “Anti-Robocall Principles,” a set of eight principles to fight “illegal robocalls” that the phone companies have voluntarily agreed to adopt by incorporation, or continued incorporation into their business practices.  The principles are available here and press release is here.

Why it matters:  “Illegal and unwanted robocalls continue to harm and hassle people every day. Consumer fraud often originates with an illegal call, and robocalls regularly interrupt our daily lives.  Robocalls and telemarketing calls are the number one source of consumer complaints at many state Attorneys General offices, as well as at both the Federal Communications Commission and the Federal Trade Commission.  State Attorneys General are on the front lines of enforcing do-not-call laws and helping people who are scammed and harassed by these calls.” according to the principles.

The coalition of companies includes twelve major carriers.

Continue Reading Anti-Robocall Principles Agreed to by Carriers and State AGs

The Federal Trade Commission’s settlement with an online consumer lending platform, Avant LLC, highlights the importance of legal and regulatory compliance in the fintech space, including—perhaps most importantly—what happens after a loan is made.

According to the Commission’s complaint, Avant offered personal consumer loans through its website. The complaint notes that although the loans were formally issued through a bank partner, Avant handled all stages of the process, and all consumer interactions, including advertising, application processing, and all aspects of loan servicing and collection of payments.

The Commission’s allegations stem primarily from Avant’s collection activities, and Avant’s representations about the payment process, under the Federal Trade Commission Act, the Telemarking Sales Rule (TSR); and the Electronic Fund Transfer Act (EFTA) and Regulation E. The allegations include that Avant:

Continue Reading Online Lender Settles with FTC on UDAP, TSR, and EFTA Claims

Whether merchants can charge consumers who pay with a credit card more and how that increase in price is described has been the subject of extensive litigation. According to a divided New York Court of Appeals, New York’s anti-surcharge law, which banned merchants from imposing a surcharge on credit customers, does not actually prohibit a merchant from charging more or characterizing the difference in price for cash versus credit as a “surcharge” as long as the total price for credit purchases is posted. As a result, retailers are free to call the higher price for credit whatever they want as long as consumers do not have to do math to figure out what that price is. The decision sets the stage for the law to be upheld against claims that it restricts commercial speech in violation of the U.S. Constitution.

In 2013, a group of retailers sued the New York Attorney General in the case Expressions Hair Design v. Schneiderman, alleging that New York General Business Law § 518 violates the First Amendment by permitting higher prices for credit card users while restricting the manner in which retailers may describe those prices. Specifically, the plaintiffs would like to use a “single-sticker” pricing scheme under which they would post a single price for cash or credit with an additional amount or percentage for credit purchases, for example, “$10 for a haircut, plus 3% if paying by credit card.”

Continue Reading No Math Allowed – The Saga of New York Surcharge Law Continues