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Wiley Consumer Protection Download (July 25, 2022) – Dodd-Frank, Consumer Protection Act


Welcome to Wiley’s update on recent developments and
what’s next in consumer protection at the Consumer Financial
Protection Bureau (CFPB) and Federal Trade Commission (FTC). In
this newsletter, we analyze recent regulatory announcements, recap
key enforcement actions, and preview upcoming deadlines and events.
We also include links to our articles, blogs, and webinars with
more analysis in these areas. We understand that keeping on top of
the rapidly evolving regulatory landscape is more important than
ever for businesses seeking to offer new and ground-breaking
technologies. Please reach out if there are other topics you’d
like to see us cover or for any additional information.

Check out Wiley’s Biden Administration Resource
Center
for insights on the shifting legal and
policy landscape under the 46th President.

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Regulatory Announcements

FTC Announces MOU with NLRB to Address Employment-Based
Consumer Protection Issues.
On July 19,
the FTC announced that it entered into a memorandum of understanding
(MOU) with the National Labor Relations Board (NLRB). The MOU
states that the “FTC and NLRB share an interest in protecting
American workers and promoting fair competition in labor
markets.” The MOU identifies a number of “issues of
common regulatory interest,” including labor market
developments related to the “gig” economy, alternative
work arrangements, the use of noncompete and nondisclosure
provisions in employment contracts, and the impact of algorithmic
decision-making on workers, among other things. The FTC and NLRB
state that the purposes of the MOU are to “facilitate (a)
information sharing and cross-agency consultations on an ad hoc
basis for official law enforcement purposes, in a manner consistent
with and permitted by the laws and regulations that govern the
Parties, (b) cross-agency training to educate each Party about the
laws and regulations enforced by the other Party, and (c)
coordinated outreach and education as appropriate.”

FTC Publishes Blog Post on ‘Highly Sensitive’
Nature of Health and Geolocation Data.
On July
11
, FTC staff published a blog post emphasizing the agency’s focus
on protecting a person’s health and precise location data as
sensitive personal information. As we discussed in more detail, the FTC’s blog
post discusses ways in which such data may be collected, shared,
and sold, and notes that the agency is “committed to using the
full scope of its legal authorities to protect consumers’
privacy” and that it “will vigorously enforce the law if
[the FTC] uncover[s] illegal conduct that exploits Americans’
location, health, or other sensitive data.”

Significant Enforcement Actions

FTC and Multistate Group File Suit and Settle with
Jewelry Retailer Based on Alleged Violations of the Military
Lending Act.
On July 20, the FTC announced that it filed suit against and
reached a settlement with Harris Jewelry for alleged violations of
state law, the Federal Trade Commission Act (FTC Act), the Truth in
Lending Act (TILA), the Electronic Fund Transfer Act (EFTA), the
Holder Rule, and the Military Lending Act (MLA). The lawsuit
represents the first action taken by the FTC under the MLA in
connection with jewelry sales and financing to members of the
military. The Commission voted 5-0 to approve the complaint and
stipulated order, which was filed in the U.S. District Court for
the Eastern District of New York. The complaint alleges that the company targeted young
service members at the lowest pay grades and: made false or
unsubstantiated claims that financing jewelry purchases through the
company would result in higher credit scores; misrepresented that
protection plans were required to finance purchases; failed to
include written disclosures in its retail installment contracts as
required by TILA and the MLA; failed to meet authorization
requirements as required by the EFTA. Harris Jewelry also allegedly
failed to provide written notice in its contracts as required by
the FTC’s Holder Rule and failed to make oral disclosures at
the time of sale as required by the MLA. Under the proposed order with the FTC and a group of 18
states, Harris Jewelry must stop collection of millions of dollars
in debt, provide approximately $10.9 million in refunds for
purchased protection plans, provide refunds for overpayments,
assist with the deletion of any negative credit entries pertaining
to debt in consumers’ credit reporting file, and once its
obligations under the order are met, complete its shutdown of
operations and dissolve pursuant to applicable state laws.

CFPB Fines Bank of America for Alleged EFTA and Other
Violations in Relation to the Disbursement of State Unemployment
Insurance Benefits.
On July 14, the CFPB
issued an order against Bank of America, Inc. (Bank of America) for
alleged violations of the Consumer Financial Protection Act of 2010
(CFPA); EFTA; and the EFTA’s implementing Regulation E. The stipulation and consent order alleges that
Bank of America failed to conduct reasonable investigations of
prepaid debit cardholders’ notices of error; failed to timely
investigate and resolve prepaid debit cardholders’ error
claims; and made it difficult for consumers to unfreeze their
prepaid debit cards or to report fraudulent use of their cards. The
order requires Bank of America to provide consumer redress and to
pay a $100 million-dollar civil money penalty. In a separate order, the Office of the Comptroller of
Currency (OCC) is fining the bank $125 million.

CFPB Seeks to Enjoin Payday Lender for Allegedly
Unlawful Lending Practices.
On July 12,
the CFPB filed a lawsuit against Populus Financial Group, Inc.
d/b/a ACE Cash Express, Inc. (ACE Cash Express) in the U.S.
District Court for the Northern District of Texas for alleged
violations of a 2014 CFPB order and the Consumer Financial
Protection Act. The CFPB alleged that ACE Cash Express concealed a free
repayment plan from consumers who were entitled to it, instead
inducing them to refinance their loans for additional fees, and
withdrew money from borrowers’ bank accounts without
authorization. The Bureau seeks permanent injunctive relief,
redress for consumers, and civil money penalties.

Upcoming Comment Deadlines and Events

FTC Seeks Comment on Revised Endorsement
Guides.
On May 19, the FTC approved a Request for Public Comment on Amendments to the
Guides Concerning the Use of Endorsements and Testimonials in
Advertising
(Request for Comment) that proposes a number of
revisions to the FTC’s Endorsement Guides. Among other matters, the
Request for Comment seeks input on treating the deletion of
negative reviews or the decision not to publish negative reviews as
a deceptive act or practice under Section 5 of the FTC Act;
addresses endorsements made on social media posts; and solicits
feedback on adding a section to the Endorsement Guides focused on
advertising towards children. The Request for Comment will
soon be published in the Federal Register, and comments are due 60
days after the date of publication.

CFPB Extends Feedback Period on Proposed Changes to
Credit Card Late Fees and Late Payment Rules.
Comments are
due August 1 on the CFPB’s Advance Notice of Proposed Rulemaking (ANPR)
seeking comment related to credit card late fees in the Credit Card
Accountability Responsibility and Disclosure Act of 2009 (CARD Act)
and Regulation Z. The ANPR requests public feedback on factors used
by card issuers to set late fee amounts; card issuers’ costs
and losses associated with late payments; the deterrent effects of
late fees; cardholders’ late payment behavior; methods that
card issuers use to facilitate or encourage timely payments,
including autopay and notifications; card issuers’ use of the
late fee safe harbor provisions in Regulation Z; and card
issuers’ revenue and expenses related to their domestic
consumer credit card operations.

FTC Requests Information on Revising Its ‘.com
Disclosures’ Guidance on Digital Advertising.
Comments
are due August 2 on a Request for Information (RFI) seeking comment
on revisions to the FTC’s business guidance titled, “.com
Disclosures: How to Make Effective Disclosures in Digital
Advertising.” The guide, which was originally published in
2013, provides guidance to businesses on how to make advertising
and marketing disclosures online, particularly in the mobile
context. The RFI seeks comment on, among other things: advertising
embedded in games, virtual reality, and microtargeted
advertisements; whether the current guidance adequately addresses
advertising on mobile devices; and the “ubiquitous use of dark
patterns, manipulative user interface designs used on websites and
mobile apps, and in digital advertising that pose unique risks to
consumers.”

FTC Seeking Comment on Amendments to the TSR.
Comments are due August 2 on a Notice of Proposed Rulemaking (NPRM) and an Advance Notice of Proposed Rulemaking (ANPR)
seeking comment on proposed amendments to the Telemarketing Sales
Rule (TSR). The NPRM proposes to amend the TSR to prohibit
business-to-business (B2B) telemarketing calls that qualify as
“deceptive” under the Rule. It also seeks comment on
modifying the TSR’s current record-keeping provisions to
require telemarketers to retain robocall recordings, telemarketing
scripts, and audio files from telemarketing calls. Further, the
NPRM proposes to require telemarketers to retain certain records
sufficient to show that a called party authorized a transaction
before they were charged. The ANPR seeks public feedback on broader
potential TSR amendments, including whether the TSR’s B2B
telemarketing exemption should be maintained, modified, or
eliminated altogether; whether the B2B telemarketing exemption
disproportionately impacts minority and marginalized communities;
whether certain inbound calls to telemarketers should be covered by
the TSR; and whether the TSR should require sellers that use “negative option” marketing to give
consumers notice and a method to cancel negative option
programs.

CFPB Extends Comment Period for Input on Relationship
Banking and Customer Service
. Comments are due
August 22 on the CFPB’s Request for Information (RFI) regarding
relationship banking and how consumers can assert the right to
obtain timely responses to requests for information about their
accounts from banks and credit unions with more than $10 billion in
assets, as well as from their affiliates.

FTC Holding Virtual Event on ‘Stealth
Advertising’ Toward Children.
On October
19
, the FTC will host a virtual event “to examine how best to
protect children from a growing array of manipulative marketing
practices that make it difficult or impossible for children to
distinguish ads from entertainment in digital media.” The
event will examine evolving practices, such as the “kid
influencer” marketplace, and the techniques being used to
advertise to children over the internet.

FTC Seeking Research Presentations for PrivacyCon
2022.
Research presentations are due July
29
for PrivacyCon 2022, which will take place
virtually on November 1. As part of the event, the
FTC is seeking empirical research and presentations on topics
including: algorithmic bias; “commercial surveillance”
including workplace monitoring and “biometric
surveillance”; new remedies and approaches to improve privacy
and security practices; and the privacy risks posed by emerging
technologies for children and teens.


*Originally published July 25, 2022

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.



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