- with readers working within the Insurance industries
Welcome to Wiley's update on recent developments and what's next in consumer protection enforcement and regulation. We cover developments with the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau, and state Attorneys General, as well as self-regulatory advertising challenges decided by BBB National Programs' National Advertising Division (NAD). Our recent State Consumer Protection Series also provides practical insights into emerging trends and priorities at the state level, including on automatic renewal laws, "junk fees," and robocalls. Wiley also has an FTC Consumer Protection and Privacy Enforcement Series and Trump Administration Resource Center to provide practical insights into emerging FTC and Executive branch priorities. Please reach out to any of our authors with any questions about recent regulatory or enforcement activity on the federal or state level.
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Select Federal Enforcement Actions
DOJ Settles with Software Company for Alleged Violations of ROSCA. On March 13, the U.S. Department of Justice (DOJ) filed a stipulated order in the U.S. District Court for the Northern District of California to resolve allegations against a software company for alleged violations of the Restore Online Shoppers' Confidence Act (ROSCA). In July 2024, upon referral by the FTC, DOJ filed a complaint against the company alleging it did not adequately disclose the terms of annual subscriptions and improperly impeded cancellation of the subscription. The company agreed to a $75 million civil penalty judgment, a requirement to provide up to $75 million in free services to customers, and injunctive relief.
FTC Sends Warning Letters to 97 Auto Dealership Groups Regarding Alleged Unlawful Pricing Practices. On March 13, the FTC sent letters to 97 auto dealership groups warning the groups that they may be engaged in alleged unlawful pricing practices in violation of Section 5 of the FTC Act. Among other things, the FTC raises concerns that the groups may be advertising prices for vehicles that do not reflect all required fees, or that reflect rebates or discounts not available to all consumers. The letters encourage the groups to review their practices, including by making sure advertised prices include all required fees and charges aside from required government charges. The FTC warns that it "will continue to monitor the marketplace and take additional action as warranted."
Select State Enforcement Actions
Massachusetts AG Settles with Finance Company for Allegedly Deceptive Lending Practices. On March 11, the Massachusetts Office of the Attorney General (AG) announced that it settled allegations against a finance company that provided housing loans to consumers. In a 2022 complaint, the Massachusetts AG alleged that the company violated the Massachusetts Consumer Protection Act by falsely marketing its loan services as "government home improvement grant[s]" and misrepresenting to consumers the terms of their home loans, which gave the company exclusive brokerage rights to the home when the consumer decided to sell. The company agreed to a $2.25 million civil penalty in addition to injunctive relief.
Maryland AG Settles with Health Care Company Over Allegedly Illegal Hospital Fees. On March 5, the Maryland AG announced that the Consumer Protection Division entered a settlement agreement with a health care company to resolve an investigation as to whether the company charged consumers outpatient facility fees without proper notice. Specifically, the Division alleged that consumers were not adequately informed that they would be subject to the facility fees in violation of the Maryland Consumer Protection Act. As part of the settlement, the health care company agreed to pay $1,985,198.90 in restitution.
Select NAD Advertising Challenge Case Decisions
NAD Rejects "Clinically Proven" and Other Health Benefit Claims for Dietary Supplement. On March 16, NAD recommended that a maker of a dietary supplement meant to increase NAD+ levels discontinue or modify its health benefit claims of certain cardiovascular, cognitive, immune, metabolic, exercise, anti-aging, and cellular repair-related outcomes. The review also found certain consumer testimonials and influencer marketing practices to be unsupported or failed to disclose their material connection to the company. Although the supplement maker voluntarily agreed to cease making certain claims related to reproductive health, sleep improvement, and being made in the USA, it plans to appeal aspects of the decision.
NAD Determines Wireless Provider's "Unlimited" Data and Coverage Claims to be Unsupported. On March 10, NAD recommended that a mobile wireless provider modify or discontinue some of its claims with respect to unlimited data plans, access to the "3 major 5G networks," and customer service response times. Specifically, NAD recommended the provider not advertise its plans as "unlimited data" since it determined that throttling after a specific cap would prevent typical online activities consistent with consumer expectations. NAD also found the "3 major 5G networks" claim misleadingly implied simultaneous access to all three networks, whereas, in fact, customers are required to choose only one of the three 5G network options. NAD also advised the provider to clarify that its "2-Minute Customer Care" claim was based on average response times, not a guaranteed service, and NAD found the provider lacked support for its comparative advertising claims about competitors lacking price stability or responsive customer care. The provider agreed to comply with NAD's recommendations.
NAD Upholds Claims About AI-Powered Baby Nursery Products. On March 3, NAD determined that a maker of baby nursery products provided sufficient peer-supported evidence to support its claim that its AI-based baby nursery products could "translate your little one's cries, letting you know if they might be sleepy, fussy, gassy, agitated, or hungry." NAD also found there was sufficient support for the company's other claims that its response-based features were optional and that data collected from the product remained anonymous and encrypted.
NAD Recommends Supplement Maker Avoid Claim of Relaxed Mood That Wrongly Implies Reduced Activity Levels. On March 2, NAD recommended that a dietary supplement maker modify a claim of supporting a "calm & relaxed mood" for children to avoid giving a misleading impression that the supplement reduces children's activity levels. Although the supplement maker submitted new evidence after a previously unfavorable ruling, NAD found the submitted studies only supported the claim that anxiety levels could be reduced, but not necessarily activity levels. The supplement maker agreed to comply with the recommendations.
Federal and State Regulatory Announcements
Trump Administration Issues Executive Order on Made in the USA Claims. On March 13, the Trump Administration issued an Executive Order directing FTC Chairman Ferguson to "wherever appropriate, prioritize enforcement actions in cases in which a seller's or manufacturer's claim that a product is 'Made in America' or 'Made in the U.S.A.', or any similar American-origin claims, constitutes a violation of law." The Executive Order also requires the FTC to consider proposing regulations "providing that the failure of an online marketplace to establish procedures for verifying country-of-origin claims may constitute an unfair or deceptive act or practice" under the FTC Act. Further, the Executive Order directs all agencies "with oversight of country-of-origin labeling" to consider proposing regulations "that promote voluntary country-of-origin labeling for products made or manufactured in the United States" in consultation with FTC Chairman Ferguson.
FTC Releases ANPRM Regarding Rental Housing Fee Practices. On March 12, the FTC released an Advanced Notice of Proposed Rulemaking (ANPRM) to address potential unfair or deceptive fees in connection with rental housing. Specifically, the FTC "is seeking written comments, including data, evidence, analyses and arguments, regarding rental housing fees and charges throughout a lease lifecycle, from application to moveout." The ANPRM is particularly interested in whether rental housing providers disclose true total rent in listings; whether providers properly represent any fees and charges; and any housing provider practices relating to application fees, security deposits, billing issues, and consumer choice that may harm consumers. Comments are due April 13.
FTC Releases ANPRM Regarding Negative Option Marketing Practices. On March 11, the FTC announced an ANPRM regarding the agency's Negative Option Rule. The ANPRM seeks public comment on whether and how the FTC should use its authority to address "negative option" marketing practices, where consumers are charged on an ongoing basis unless they take some affirmative action to cancel, including subscription services and automatic renewal contracts. Among other things, the ANPRM seeks information on the extent businesses market products or services using negative options; practices that that result in consumers being enrolled without express informed consent or deter consumers from canceling their enrollments; and ways the Commission can address unfair or deceptive negative option practices, including by reviving some portions of the now-vacated amended Negative Option Rule adopted by the previous Administration (often called the "Click-to-Cancel" Rule). Comments are due April 13. We discuss the new ANPRM in more detail here.
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