With the end of the Supreme Court’s term in June, most eyes have been on the release of the last remaining merits decisions. In the midst of issuing the final opinions of the term, the Court also granted certiorari on a number of cases, one of which—Securities and Exchange Commission v. Jarkesy—might have implications for the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).

In Jarkesy, the SEC sued talk radio host George Jarkesy and his two hedge funds (collectively, “the Jarkesy Parties”) through an administrative action before an SEC administrative law judge (ALJ). After an evidentiary hearing, the ALJ determined that the Jarkesy Parties committed securities fraud, and the Commission affirmed the ALJ’s decision, imposing a civil penalty, disgorgement of ill-gotten gains, and enjoining Jarkesy from various securities industry activities. The Jarkesy Parties proceeded to appeal the Commission’s decision to the U.S. Court of Appeals for the Fifth Circuit. The Jarkesy Parties appealed on several constitutional grounds previously raised and denied during the ALJ and Commission proceedings:

Continue Reading Supreme Court Case Watch: <em>Securities and Exchange Commission v. Jarkesy</em> and Its Impact on Independent Agencies

Thirteen months after proposing sweeping changes to its Endorsements and Testimonial Guides (Guides), the Federal Trade Commission (FTC) has finalized its revised guidelines and released an updated set of FAQs to help guide the industry with respect to the proper use of customer reviews, influencer marketing, and traditional endorsements and testimonials. 

The new Guides are over 80 pages. We will dive into specific sections in greater depth in the coming weeks, but here are some highlights:

Continue Reading FTC Finalizes Updated Endorsement and Testimonial Guides

On June 16, 2023, the Federal Deposit Insurance Corporation (FDIC) released an update to its Supervisory Guidance on Multiple Re-Presentment NSF Fees (FIL-40-2022) (the “Guidance”), to provide additional guidance for supervised institutions on the consumer compliance risks associated with assessing multiple non-sufficient funds (NSF) fees for the re-presentment of unpaid transactions. This alert discusses the potential risks the FDIC identified and outlines the risk mitigation practices that supervised institutions can implement to mitigate risks when processing multiple re-presentment NSF fees.

Although the Guidance’s applicability is limited to FDIC supervised institutions, the information provided on potential risks and mitigation practices should be taken into consideration by any financial institutions or merchants that assess multiple re-presentment NSF fees in connection with billing consumers.

Continue Reading FDIC Releases Revised Supervisory Guidance on Multiple Re-Presentment NSF Fees

On Tuesday the FCC released a Notice of Proposed Rulemaking proposing to require cable operators and direct broadcast satellite (DBS) providers to specify an “all-in” total price for their video service, both in their promotional materials and on subscribers’ bills.

The proposal is intended to help consumers understand the complete cost of video service, to provide consumers with the ability to comparison shop among competing service providers and to compare programming costs against those of alternative programming providers, such as streaming services.

The proposal builds upon the recently implemented Broadband Nutrition Label requirement, which demands that broadband Internet providers display easy-to-understand service performance labels akin to food labels. The proposal is also consistent with the broader federal effort driven by the White House to eliminate so-called junk fees across a variety of industries. Such fees are service provider mandatory fees that are not fully disclosed in provider marketing/advertisements and that later surprise consumers when they are billed.

Continue Reading FCC Proposes “All-In” Video Service Advertising Rules for Cable and Satellite TV

The Federal Communications Commission (FCC) has issued a Notice of Proposed Rulemaking intending to strengthen consumers’ ability to revoke consent to receive both robocalls and robotexts, in addition to strengthening callers’/texters’ obligations to honor such requests in a timely manner.

The Telephone Consumer Protection Act (TCPA) restricts callers from making robocalls and robotexts unless they have received the prior express consent of the called party, subject to a couple of exemptions. The FCC’s proposed action would broaden a consumer’s ability to revoke consent in “any reasonable way.” For example, simply using words such as “stop,” “revoke,” “end,” or “opt out” in response to a call or text would create a presumption, absent contrary evidence, that the consumer has revoked consent.

Continue Reading FCC Proposes Codifying New TCPA Consent Rules in Notice of Proposed Rulemaking

The Federal Trade Commission (FTC) recently announced a settlement with a group of related companies and two of their officers that used a merchant of record (MoR) model to facilitate sales for merchants. According to the FTC, the MoR businesses violated the law by assisting and facilitating fraudulent telemarketing sales of tech support services and laundering credit card charges through the defendants’ own merchant processing accounts.

The MoR model is one of several novel models payments companies and platforms have launched in the marketplace. While numerous compliance questions related to money transmission and unlawful payments aggregation abound, this particular FTC case warns that consumer protection agencies are taking a closer look at risks presented by the MoR model.

Continue Reading Increasing Regulatory Scrutiny for the Merchant of Record Model

This week, a federal court in California issued an 80-page opinion that painstakingly walks through claims made against several celebrities who had promoted the Ethereum Max (EMAX) cryptocurrency, also called tokens.

The lawsuit was filed last year against Kim Kardashian, Floyd Mayweather, and former professional basketball player Paul Pierce, challenging their EMAX endorsements and social media posts. Since then, the plaintiffs have amended the complaint multiple times.

Among other issues it addressed, this week’s court decision provided a helpful reference point showing where a court aligned with and diverged from the Federal Trade Commission’s Endorsement Guides.

First, the court found that the “#AD” disclaimer in the following post made clear that Kardashian was being paid, even though it appeared toward the bottom of the post.

Continue Reading Court Provides Guidance on Social Influencer Advertising in Ethereum Max Crypto Lawsuit

Last month, Florida Gov. Ron DeSantis signed the much-anticipated amendment to the Florida Telemarketing Solicitation Act (FTSA) into law, significantly limiting the ability of private plaintiffs to file telemarketing lawsuits under the FTSA. While this will undoubtedly stem the tide of lawsuits under Florida’s law, class action plaintiffs’ attorneys have wasted no time in finding new states to file suit.

Less than a week before Florida amended the FTSA, a plaintiff filed the first lawsuit under Oklahoma’s Telephone Solicitation Act (OTSA), Streater v. WhaleCo, Inc. The lawsuit challenges text messages sent by WhaleCo., the operator of an online marketplace, alleging violations of the Telephone Consumer Protection Act and the OTSA. According to the complaint, the defendant sent multiple texts with coupon codes to the plaintiff to “advertise and call attention to Defendant’s products and related services,”

Continue Reading Florida Limits Its Telemarketing Law, but Other State Laws Continue to Gain Traction

As part of a broader campaign to go after “robocall” violations, the Federal Communications Commission (FCC) has announced a $5,134,500 fine against a company and its owners for making 1,141 robocalls in 2020 that violated the Telephone Consumer Protection Act (TCPA). The company told recipients of the robocalls that if they voted by mail, their personal information would “be part of a public database that will be used by police departments to track down old warrants and be used by credit card companies to collect outstanding debts.” The case is a strong reminder that political calling campaigns are also subject to the TCPA.

Both the TCPA and the FCC’s rules prohibit prerecorded voice calls to wireless telephone numbers without the recipients’ prior express consent, and this is true regardless of the caller’s intent. These restrictions apply equally to both telemarketing and informational calls, including all non-commercial and political calls. The only exception is for calls that are made for an emergency purpose.

Continue Reading FCC Levies $5 Million Fine for Political Calling Campaign That Violated the TCPA

Last month, Florida governor Ron DeSantis signed into law amendments to the Florida Telephone Solicitation Act (FTSA) that scale back the scope and reach of the statute, bringing it in line with federal TCPA standards and providing needed comfort to good faith marketing companies operating in Florida.

Since the last statutory changes in July 2021, the FTSA has severely impacted telemarketing and text marketing businesses marketing to Florida residents and otherwise conducting business in the state. Like the federal Telephone Consumer Protection Act (TCPA), the FTSA prohibits using automated dialers to call or text consumers without their consent.

The Florida law also enables consumers to recover $500 per call and provides for up to $1,500 in treble damages for willful or knowing violations, plus reasonable attorney’s fees and costs. To date, the FTSA has also had much more lenient standards for bringing a claim, resulting in Florida being a hotbed of state-level litigation in the area.

Continue Reading Florida Adopts Changes to the Florida Telephone Solicitation Act