FTC Updates Guidance for Mobile and Internet Advertising Disclosures

Yesterday, the FTC released guidance for mobile and other online advertisers. The new guidance, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising,” adapts and expands prior FTC guidance to account for a decade’s worth of additional experience with online marketing practices, consumers’ increasing use of smartphones, and merchants’ increasing use of social media marketing.

The new guidance highlights several key considerations for businesses as they develop advertisements for online and mobile media:

  • The same consumer protection laws – e.g. UDAP – that apply to commercial activities in other media apply online and in the mobile marketplace.
  • Limitations and qualifying information should be incorporated into any underlying claim, rather than provided as a separate disclosure qualifying the claim.
  • Marketing materials that may be viewed on a variety of platforms, including handheld devices, should be designed so that required disclosures are effectively delivered on all of the platforms.
  • Required disclosures must be clear and conspicuous, as determined by numerous factors.
  • If a disclosure is necessary to prevent an advertisement from being deceptive, unfair, or otherwise violative of a FTC rule, and it is not possible to make the disclosure clearly and conspicuously, then that ad should not be disseminated.

To meet the clear and conspicuous standard, Read more…

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CFPB Proposes Trial Consumer Disclosure Program

On December 13, as part of its Project Catalyst, the CFPB proposed a new policy that will allow financial institutions to conduct trial consumer disclosure programs. Participating firms would receive time-limited exemptions from federal disclosure laws in exchange for sharing with the CFPB the results of their trial disclosures. According to the proposed policy, firms seeking to participate in the program will need to submit to the CFPB information about the proposed disclosure program, including (i) the type of disclosure and laws to be waived in connection with the program, (ii) the proposed changes, expected improvements from the changes, and metrics for evaluating the improvements, (iii) the duration of the test and the size, location, and nature of the consumer population involved in the test, and (iv) the names and planned roles of any third-party vendors. In considering proposed trial disclosures, the CFPB will evaluate, among other factors, (i) how effectively and efficiently the proposed trial will test for potential improvements to consumer understanding about the costs, benefits, and risks of products and services, (ii) how the proposed trial will help develop more cost-effective disclosure rules or policies, (iii) the extent to which the program is designed to mitigate any risk to consumers, (iv) the extent to which the program may help the CFPB develop rules or policies to correct or mitigate market failure, and (v) the strength of the company’s compliance management system relative to the size, nature, and complexity of the company’s consumer business. The proposal is subject to a 60-day notice and comment period, which begins once the proposal is published in the Federal Register.

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