InfoBytes Blog
California enacts new consumer protections on disclosures and marketing
On June 14, the Governor of California approved SB 1096 (the “Act”) to amend the Consumers Legal Remedies Act and regulate mailed solicitations about consumer financial products. Subject to certain exceptions, the amendment will require covered persons to include a disclosure statement in enlarged, bold type on the front of any envelope containing a solicitation for a consumer financial product or service that would be sent by physical mail. The bolded disclosure must state clearly that the content would be an advertisement and that the recipient will “not [be] required to make any payment or take any other action in response to this offer.”
The Act also specified unfair or deceptive acts or practices, including, among other things, misrepresenting the terms of a transaction, inserting unconscionable provisions in contracts, and advertising prices for goods or services that do not include all mandatory fees or charges, subject to certain exceptions. It also will prohibit deceptive representations using geographic origin designations or making false claims about a product’s sponsorship or benefits. The legislation will extend to mortgage brokers and lenders and prohibit them from using a home improvement contractor to negotiate the terms of a loan secured by the home that would be used to finance a home improvement contract or any portion of such a contract. Additionally, the bill will address issues related to advertising and promoting events concerning veterans’ benefits. If it were to be the case, the Act will mandate that any such promotion disclose that the event was not sponsored by or affiliated with the VA, the California Department of Veterans Affairs, or any other congressionally-chartered or recognized organization for veterans, or any of their auxiliaries. The Act will go into effect on January 1, 2025.