October 28, 2015

Key Takeaways from the Consumer Protection Forum

Holland & Knight Alert
Anthony E. DiResta | Kwamina Thomas Williford | Brian J. Goodrich

Holland & Knight and the Word of Mouth Marketing Association (WOMMA) hosted a half-day forum that featured government officials discussing hot-button issues in consumer protection regulation and enforcement. Speakers at the Oct. 6 event included Jessica Rich, Director of the Federal Trade Commission's (FTC) Bureau of Consumer Protection; Greg Nodler, Senior Counsel for Enforcement Policy and Strategy at the Consumer Financial Protection Bureau (CFPB); and District of Columbia Attorney General Karl Racine.

Also, a panel discussion was held in which members of the business community voiced their reactions to the speakers' remarks. The speakers touched on a variety of topics, including privacy and data security; advertising, marketing and public relations practices; the represented agencies' law enforcement priorities; and current business practices that give government officials concern.

Guest Speaker Highlights

Jessica Rich, Director of the FTC's Bureau of Consumer Protection

Ms. Rich spoke about how the digital revolution has fundamentally altered how companies connect with consumers, as well as how the FTC works to protect consumers in the digital age. Among the key takeaways:

  • Disclosure is a top priority for the FTC. According to Ms. Rich, the line between advertising and objective content has become blurry in the digital age. Consumers have a right to know what messages are paid marketing as opposed to unsolicited endorsements. Thus, disclaimers need to be on all paid endorsements and reviews. Ms. Rich said another priority is ensuring that disclosures on all types of platforms are clear and conspicuous. Ms. Rich spoke about the FTC's efforts to ensure that principles of fair advertising and disclosure must extend to all advertising platforms. By way of example, she mentioned the new native advertising guidelines that the FTC will publish later this year.
  • The FTC will continue to be active in the area of data privacy in the coming year. Specifically, companies' use of consumer data has raised privacy concerns in the eyes of the FTC. Ms. Rich emphasized that companies should take active steps to protect consumer data.
  • Another top priority for the FTC is going after companies that engage in illegal robocalling practices.

Greg Nodler, CFPB Senior Counsel for Enforcement Policy and Strategy

Mr. Nodler spoke about how the CFPB evaluates targets for enforcement actions, and shared insight into its process of conducting enforcement actions. Takeaways from Mr. Nodler's speech include:

  • When considering whether or not to issue a civil investigation demand (CID), the CFPB office considers the number of victims, any temporary or long-lasting harm to consumers, and if the action targeted affects a "vulnerable" population, such as the elderly.
  • Companies looking to be in compliance with CFPB regulations should follow the guidance contained in the CFPB Responsible Conduct Bulletin.
  • Mr. Nodler had advice for companies under investigation. The CFPB looks favorably upon companies that take the bureau's CIDs seriously. Ways a company can demonstrate this include attending the meet and confer, having internal IT staff participate in the meet and confer to work out technical details with producing information, and being cooperative throughout the life of the investigation.

Karl Racine, Attorney General for the District of Columbia

The District of Columbia's first elected Attorney General, Mr. Racine emphasized that consumer protection is a priority for the Office of the Attorney General (OAG). He stressed the OAG's desire to work in a cooperative and consultative manner with companies doing business in D.C., but added that the OAG will vigorously and aggressively prosecute bad actors who violate consumer protection laws. Mr. Racine also brought his consumer protection team with him to walk through key areas of concern. His team included Public Advocacy Section Chief Bennett Rushkoff, Assistant Attorney General Jimmy Rock, Assistant Attorney General Richard Rodriguez, and Community Outreach Director Robert White. Takeaways from the team's presentation include:

  • Attorney General Racine stated that the OAG is working in partnership with the CFPB, FTC and FCC to coordinate enforcement priorities and actions.
  • Attorney General Racine encouraged companies to come in and explain their business to the OAG.
  • Top areas of current concern and focus for the OAG include debt collection, mortgage lending, privacy, as well as business engaged in the "sharing economy."
  • The OAG is investing heavily in community outreach. This includes responding to complaints filed by D.C. residents, as well as educating the district's consumers.

Panel Discussion

The final segment of the forum was a panel discussion featuring members of the business community reacting to the regulators' comments, as well as giving some of their current concerns with, and challenges presented by, the direction of consumer protection law. The panel included Ellie Boragine, Vice President and Chief Advertising Counsel, American Express; Devin Redmond, CEO, Nexgate; and Jess Sharp, Managing Director, Center for Capital Markets Competitiveness, U.S. Chamber of Commerce.

The panelists voiced frustration over the lack of clarity and guidance by government agencies as to how to comply with new regulations. While acknowledging the duty of the regulators to address consumer protection concerns in new industries and with respect to the proliferation of new technologies, the panelists critiqued the reactionary and often scattershot approaches by federal regulators. Such an approach, they said, creates moving targets that companies are challenged to account for in their compliance management systems. As an example, they pointed to some of the recent work of the CFPB – which they called the "new kid on the block" – in particular its new regulations aimed at auto lenders."

Upcoming Program: Navigating Consumer Protection Investigations

Consumer protection law enforcement inquiries and regulatory compliance should be a key concern given today's regulatory environment. Holland & Knight is committed to providing you with programs and events that provide you with timely information from senior governmental decision makers, as well as practical and strategic guidance. Our firm will host a webinar on Wednesday, Nov. 18, to discuss strategies used to succeed in a law enforcement investigation by the FTC, CFPB or a State Attorney General. Additional program information is available here.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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