FTC Updates COPPA Guidance for IoT and New Consent Options

little girl and laptopOn June 21, 2017, the Federal Trade Commission (FTC) updated one of its Children’s Online Privacy Protection Act (COPPA) compliance guides for businesses. Known as the “Six-Step Compliance Plan,” this document provides a step-by-step road map for determining if a company is covered by COPPA and what to do to comply.

COPPA applies to operators of websites and online services that collect “personal information” from children under 13 years of age, where the site or service is directed to children or has actual knowledge that it is collecting personal information from a child. COPPA’s coverage extends to a variety of online services, such as mobile apps, internet-enabled gaming platforms, and – in some cases – companies that collect personal information directly from users of another website or online service (such as ad networks and plug-ins).

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CFPB Issues Final “Arbitration Agreements Rule:” New CFPB Rule Bans Class Action Bars in Arbitration Clauses

GavelOn Monday, July 10, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a final rule – the “Arbitration Agreements Rule” – regulating arbitration agreements in contracts for certain core consumer financial products and services. Venable has been monitoring the development of this rule, and our past coverage can be seen in a webinar and a blog post.

In prepared remarks, CFPB Director Richard Cordray explained the Bureau’s reasons for ultimately promulgating this regulation, and he stated that such clauses “force consumers either to give up or to go it alone – usually over relatively small amounts that may not be worth pursuing on one’s own. Including these clauses in contracts allows companies to sidestep the judicial system, avoid big refunds, and continue to pursue profitable practices that may violate the law and harm large numbers of consumers.”

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Consumer Financial Services Practice Digest

In this issue we discuss that under the cloud of speculation hanging over the CFPB they continue to launch supervisory examinations and enforcement investigations, and also held a public event on June 22 discussing the Public Student Loan Forgiveness Program.

Also in this issue is commentary around a top state regulator issued a reminder to obtain prior approval of acquisitions or changes in control, the division between the courts on the ALJ Appointments issue and also how new bills would require disclosure of beneficial owners.

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

If a Call Is Made From the Woods and Nobody’s Around To Receive it, Is it a TCPA Violation?: Ringless Voicemail FCC Petition Post-Script

Am I crazy? Did my phone ring? These questions may have crossed your mind during that moment when you look down at the top left corner of your cell phone and see the universal icon for new voicemail. Many marketers are now using or considering using ringless voicemail technology, or Direct-to-Voicemail cell messaging, to leave messages directly on a cell phone’s voicemail server. In simplistic terms, ringless voicemail technology allows for voice messages to be deposited directly into a consumer’s cell phone voicemail box, without any ringing on the cell phone and without being carried over the cellular network.

We recently blogged about a March 2017 petition filed at the Federal Communications Commission (FCC) by All About the Messaging, LLC (AATM), which sought a pronouncement that the deployment of ringless voicemail technology does not constitute a “call” under the Telephone Consumer Protection Act (TCPA). AATM’s petition turned out to be a lightning rod for supporting and opposition comments.

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

telemarketing lawsCan 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.

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

United States Supreme Court BuildingThe 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.

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

hashtagIt 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:

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

medal winnerAnd 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.

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Student Loan Market in FTC’s Cross Hairs

student loan debtLots 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.

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

Virtual DataIn 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.