Eleventh Circuit Stays Enforcement of FTC’s LabMD Order

In an order released November 10 in LabMD, Inc. v. FTC, the Eleventh Circuit stayed the execution of an FTC data security enforcement order against LabMD Inc. pending the appellate court’s own ruling on whether the agency acted on an unreasonable interpretation of what security companies must provide.  LabMD, Inc. v. FTC, No. 16-16270-D, Order Granting Stay (11th Cir. Nov. 10, 2016).

The FTC had ruled in July that LabMD’s data security practices violated the FTC Act, clarifying and expanding upon the FTC’s authority to regulate corporate data security practices. After an FTC administrative law judge denied LabMD’s request to stay enforcement until the medical company had exhausted its remedies on appeal, LabMD appealed to the Eleventh Circuit, which granted the stay in a unanimous decision.

Noting that the case turns upon whether the FTC’s interpretation of the FTC Act is reasonable, the Appellate cCourt granted the stay based on its finding that (i) “there are compelling reasons why the FTC’s interpretation may not be reasonable”; (ii) complying with the FTC’s Order would cause LabMD irreparable harm given its financial situation, (iii) there would be no substantial injury to other parties given that LabMD is no longer operating, and (iv) the public interest factor was neutral. The appeal will now proceed on the merits of LabMD’s arguments for reversal of the FTC’s enforcement order.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: ,
POSTED IN: Courts, Data Risk / Privacy

As Part of Joint Initiative with the CFPB, FTC Launches Updated, Mobile-Friendly Military Consumer Website

On November 15, the FTC anounced the launch of its new mobile-friendly “financial readiness” website, which is designed to help members of the military community navigate personal financial decisions in light of the unique challenges they face, such as frequent relocations and deployment. The website, which may be found at www.Military.Consumer.gov, is a collaborative effort of the FTC, DoD, CFPB and others.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: , ,
POSTED IN: Consumer Finance, Miscellany

FTC Unveils Agenda for Upcoming FinTech Forum

On October 17, the FTC released the agenda for its upcoming FinTech forum, which is the second in an ongoing event series. The FTC’s half day event will take place on October 26 in Washington, DC from 1:00 to 4:30 pm. The event will consist of panel discussions relating to (i) peer-to-peer payment systems, which allow consumers to exchange money electronically; and (ii) crowdfunding, which is the use of online platforms to fund a project or venture by raising money from a large number of people.

LinkedInFacebookTwitterGoogle+Share

FCC Releases Revised Proposed Privacy Rules for Broadband Providers

On October 6, the FCC issued a fact sheet on revised privacy rules related to broadband internet services. According to the fact sheet, the proposed rules “are designed to evolve with changing technologies and encourage innovation, and are in harmony with other key privacy frameworks and principles – including those outlined by the [FTC] and the Administration’s Consumer Privacy Bill of Rights.” The FCC first issued a set of privacy rules concerning consumer rights in relation to broadband internet service providers (ISPs) in March. In Chairman Tom Wheeler’s October 6 blog post regarding the recent revisions, he noted that the revised proposal “provide[s] consumers increased choice, transparency and security online.” The proposed rules, among other things, would require ISPs to (i) let consumers know the type of information they are collecting, specify how and the extent to which the information can be used and shared, and identify with whom the information is shared; (ii) obtain consumers’ opt-in consent to use sensitive information, including, among other things,  geo-location, social security numbers, and web browsing history; and (iii) provide an opt-out option, consistent with customer expectations, for the use and sharing of non-sensitive information. Notably, the proposed rules “do not apply to the privacy practices of websites or apps, over which the [FTC] has authority…even when a website or app is owned by a broadband provider.” The Commission is scheduled to vote on the proposal on October 27.

LinkedInFacebookTwitterGoogle+Share
COMMENTS: Comments Off
TAGS: ,
POSTED IN: Data Risk / Privacy, Federal Issues

FTC Announces $1.3 Billion Judgment Against Payday Lenders

On October 4, the FTC announced a $1.3 billion judgment against defendants responsible for operating an allegedly deceptive payday lending scheme. The judgment is the result of 2012 complaint in which the FTC alleged that the defendants engaged in deceptive acts or practices in violation of Section 5(a) of the FTC Act by making false and misleading representations about costs and payment of the loans. According to the FTC, the defendants claimed that they would charge consumers the loan amount and a one-time finance fee.  However, the court found that the defendants “made multiple withdrawals from consumers’ bank accounts and assessed a new finance fee each time, without disclosing the true costs of the loan.” The $1.3 billion order is the largest litigated judgment the FTC has obtained to date.

LinkedInFacebookTwitterGoogle+Share