Federal Trade Commission
Practice Overview
The Federal Trade Commission (FTC) has for decades pursued cases involving allegations of deceptive, misleading, and illegal marketing, lending, servicing, and collection practices, relying on its independent investigative power and ability to bring enforcement actions and litigate cases. Our attorneys, which include former FTC lawyers, have extensive experience responding to civil investigative demands (CIDs), defending clients in enforcement actions, and litigating against the FTC. We defend companies in FTC investigations involving allegations of unfair or deceptive acts or practices (UDAP), unfair debt collection practices, deceptive marketing practices, illegal lending and credit reporting practices, unfair servicing practices, violations of consumer privacy rights, and failure to maintain security for sensitive consumer information — all of which are FTC priorities, and all in which we have comprehensive substantive and procedural knowledge. The FTC has expressly declared that policing fintech companies is also a priority. Like our firm’s substantive depth in the financial services space, our firm’s extensive Fintech practice, highly ranked by Chambers, is cross-collaborative with our FTC practice. We are deeply involved in helping companies bring emerging business models and technologies to market, and our representations across the fintech spectrum augment our extensive enforcement and litigation capabilities.
The FTC often works closely and conducts parallel investigations with other government entities, including State Attorneys General and the Consumer Financial Protection Bureau. We frequently represent companies in these matters and understand how to balance the competing demands of maximizing efficiency and minimizing costs while maintaining strategic goals.
Our representative enforcement and investigation matters before the FTC include:
- Numerous clients in response to CIDs involving mortgage lending, credit reporting, unsecured consumer lending, payment processing, privacy and security practices, auto financing programs, and consumer demand deposit accounts
- Multiple clients on compliance related to cryptocurrency issues and payment systems, and processing rules and regulations
- Nonbank lenders in extensive litigation with the FTC and parallel class actions alleging deceptive lending practices, resulting in a global nationwide settlement (a total of $240 million in redress resolving FTC and consumer class actions)
- A payday loan/check-cashing management company in an enforcement action alleging violations of the Fair Credit Reporting Act (FCRA) Disposal Rule and the Gramm–Leach–Bliley Act (GLBA) Safeguards Rule
- The defendant in a settlement in which the FTC alleged unfair and deceptive trade practices, as well as violations of the Fair Debt Collection Practices Act (FDCPA), FCRA, and Truth in Lending Act (TILA) in connection with the servicing of residential mortgages
- The defendant in a settlement in which the FTC alleged unfair and deceptive trade practices regarding mortgage loan servicing and collections
- A clean energy administrator in connection with regulatory due diligence for a potential transaction with a competitor
- A client in litigation concerning the sale of a U.S. subsidiary
- A client in a settlement alleging violations of its “Made in the USA” advertising standards
Our FTC enforcement experience is enhanced our extensive regulatory and compliance experience, as well as our broader enforcement practice with multiple federal and state agencies, and allows us to provide practical, forward-thinking advice to companies seeking to develop internal controls that monitor compliance with laws, regulations, and guidance issued or enforced by the FTC. This advice covers a wide range of regulatory issues that fall under the FTC’s jurisdiction, including:
- The Children’s Online Privacy Protection Act (COPPA)
- The Consumer Leasing Act (CLA)
- The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM)
- The Electronic Fund Transfers Act (EFTA), including best practices for obtaining appropriate authorization for payments, controls around payment processing, and EFTA’s prohibition on conditioning an extension of credit on enrollment in preauthorized fund transfers
- FDCPA
- FCRA’s Furnisher Rule and other obligations that are triggered in the context of pre-screening, loan origination, and information sharing among affiliates
- The FTC’s Endorsement Guides, including their applicability to online reviews, bloggers and social-media influencers
- GLBA’s privacy requirements and cybersecurity guidance promulgated by the FTC
- The U.S./EU Privacy Shield
- The Telephone Consumer Protection Act (TCPA)
- The Telemarketing Sales Rule (TSR)
- TILA, including Regulation Z
- U.S. origin claims and “Made in the USA” standards
Some of our representative compliance matters include:
- Review, revision, and development of comprehensive privacy programs for both U.S.-based and international companies
- Development of multiple complaint-management programs to detect, address, and prevent consumer complaints, which are often the starting point for FTC investigations
- Assisted with reviews and redesigns of multiple advertising campaigns, including through print, electronic and social-media channels, and addressing the nuances of mobile-device disclosures
- Provided guidance concerning the engagement of influencers in brand marketing, a growing area of concern
- Assistance with compliance and disclosure protocols involving in-app game and mobile-phone purchases
- Assistance with understanding post-acquisition compliance obligations as the purchaser of an entity with an existing consent order and considerations in seeking modifications to same
Articles
"Data security best practices for licensed lenders' telework" by Sherry-Maria Safchuk and James C. Chou (Law360)
State-licensed/registered brokers, lenders and servicers have increased their focus on data security as the spread of COVID-19 has extended work-from-home orders, and what now seems to be a lasting acceptance of remote work means that the tools used to secure data will remain relevant when the...
Articles"Educational tools may bring regulatory risk for fintech cos." by H Joshua Kotin, Michelle L. Rogers, and Kathryn R. Goodman (Law360)
Financial services providers are increasingly combining delivery of products and services with advice designed to help consumers make better-informed financial decisions. Fintech companies, which typically rely upon data and analytics as fundamental components of their business proposition, should...
Articles"Ruling on anti-hacking law may guide fair lending tests" by Jeffrey P. Naimon and H Joshua Kotin (Law360)
Regulators, consumer groups, academics and private litigants are grappling with the fair lending implications of the credit models powering the explosive growth in online lending by banks and financial technology firms. The U.S. District Court for the District of Columbia in late March concluded...
Articles"Op-ed: Prepare for the coronavirus scams: Learning from post-9/11 fraud" by Daniel R. Alonso (Daily News)
On the morning of Sept. 11, 2001, Beatrice Kaufman sat in her Hamptons house watching the Twin Towers collapse. Although she lived and worked in Manhattan, her 6,000-square-foot apartment was being renovated, so she stayed at her country home instead. But that did not stop her from filing papers...
Articles"Don’t let your shield down—FTC gets tough on EU-U.S. privacy shield framework" by Elizabeth E. McGinn and Magda Gathani (Bloomberg Law)
The Federal Trade Commission took more enforcement actions related to the EU-U.S. Privacy Shield Framework in 2019 and the beginning of 2020 than it did in the prior three years combined. The FTC also has alleged deception in many cases where there was no indication that any misrepresentations...
Articles"Managing legal risks to U.S. companies from foreign cyberattacks" by Amanda R. Lawrence, Sasha Leonhardt, and James C. Chou (Cybersecurity Law Report)
Protecting online systems against individual hackers has been a top priority for companies for several years, but as we begin a new decade, a new threat has risen to the forefront: well-funded and sophisticated foreign governments seeking to wage a new kind of warfare on the United States. In...
Articles"A new era of FCRA scrutiny for consumer data furnishers" by Jessica L. Pollet (Law360)
Furnishers provide information to consumer reporting agencies on over 1.3 billion consumer credit accounts or other tradelines each month, with the three largest national consumer reporting agencies holding the personal information of over 200 million consumers. Given the extent of the consumer...
Articles"Alternative data and fair lending face off: The relationship is complicated" by Jonice Gray Tucker and Caroline M. Stapleton (Mortgage Compliance Magazine)
Thinking of getting into a relationship with alternative data? You're not alone. Use of "alternate data," a term broadly used to describe consumer information gathered from non-conventional sources, is becoming increasingly attractive to mortgage lenders, their service providers, and even consumers...
Articles"Proceed with caution: Expanded role for the FTC on the road ahead" by Jonice Gray Tucker and Amanda R. Lawrence (American Bar Association Business Law Today)
Recent changes in agendas and leadership at the federal level are prompting companies offering financial products and services to question what consumer protection enforcement will look like on the road ahead. There has been significant discussion about the increasing role of state regulators,...
Articles"What to expect from increased FTC-state AG collaboration" by Michelle L. Rogers and Katherine L. Halliday (Law360)
In prepared remarks at the winter meeting of the National Association of Attorneys General on March 5, 2019, Federal Trade Commission Chairman Joseph Simons advocated for increased collaboration with state attorneys general and noted that such collaboration is critical to the FTC’s mission. His...
Articles"FTC has big agenda for 2019. How should companies prepare?" by Michelle L. Rogers and Katherine L. Halliday (Bloomberg Law)
Federal Trade Commission Chairman Joseph Simons recently previewed an aggressive and expansive consumer protection agenda for 2019, invoking the commission’s broad powers to pursue unfair or deceptive acts or practices, and adding “fraudulent” to the types of conduct he expects to police. Among the...
ArticlesC-Suite Review: Expanded role for the FTC on the road ahead?
Recent changes in agendas and leadership at the federal level are prompting companies offering financial products and services to question what consumer protection enforcement will look like on the road ahead. There has been significant discussion about the increasing role of state regulators,...
C-Suite Review"How FTC is stepping up its consumer protection efforts" by Jonice Gray Tucker and Amanda Lawrence (Law360)
Recent changes in agendas and leadership at the federal level are prompting companies offering financial products and services to question what consumer protection enforcement will look like on the road ahead. There has been significant discussion about the increasing role of state regulators,...
Articles"FTC v. D-Link Systems and the internet of things" by Elizabeth E. McGinn, John B. Williams, and Christopher M. Walczyszyn (Westlaw)
As businesses expand the availability of internet-connected devices, Buckley Sandler LLP attorneys Elizabeth McGinn, John Williams and Christopher Walczyszyn address the Federal Trade Commission’s role in regulating and enforcing “internet of things” device security to protect consumers’ data...
ArticlesCaveat Emptor or Caveat Vendor? The Evolution of Unfairness in Federal Consumer Protection Law
Under the Federal Trade Commission’s original interpretation of unfair or deceptive acts or practices law, financial institutions could feel some sense of security that, if they provided a consumer with a clear understanding of a proposed transaction, the burden was on the consumer to determine...
Articles
News & Blogs
FTC comments on application of ECOA, Regulation B in response to CFPB RFI
Recently, FTC staff submitted a comment letter in response to the CFPB’s request for information (RFI) seeking input on ways to provide additional clarity under the Equal Credit Opportunity Act (ECOA) and implementing Regulation B. As previously covered by InfoBytes , the CFPB issued the RFI last...
InfoBytesFTC settles with company for data security lapses
On December 16, the FTC announced a settlement with a Nevada-based travel emergency services provider, resolving allegations that the company violated the FTC Act by failing to implement a comprehensive security program to ensure the security of personal consumer information, including sensitive...
InfoBytesFTC settles with mortgage analytics company over vendor oversight deficiencies
On December 15, the FTC announced a settlement with a Texas-based data mortgage analytics company (defendant), resolving allegations that the defendant violated the Gramm-Leach Bliley Act’s Safeguards Rule (Safeguards Rule) and the FTC Act by failing to ensure a third-party vendor hired to perform...
InfoBytesFederal and state authorities target income scams
On December 14, the FTC, along with 19 federal, state, and local law enforcement partners, announced “Operation Income Illusion,” which encompasses more than 50 enforcement actions against scams targeting consumers with false promises of income and financial independence. According to an analysis...
InfoBytesFTC orders social media and video streaming companies to provide data on privacy practices
On December 14, the FTC issued orders to nine social media and video streaming companies requiring each company to provide information on their collection, use, and presentation of personal information, including their data gathering and advertising practices. The orders are issued pursuant to...
InfoBytesFTC settles with payment processor for fraud
On December 10, the FTC announced a settlement with a payment processor and its former CEO (collectively, “defendants”) for allegedly processing consumer credit card payments for certain entities “when they knew or should have known that the schemes were defrauding consumers,” in violation of the...
InfoBytesSatellite company to pay over $200 million for telemarketing violations
On December 7, the DOJ announced a settlement with a satellite service provider totaling over $210 million in penalties to be paid to the United States and four states for alleged violations of the TCPA, the FTC Act, and similar state laws. The settlement stems from an action brought by the United...
InfoBytesFTC charges company with passive debt collection
On November 30, the FTC announced a stipulated order entered by the U.S. District Court for the Eastern District of Missouri against a debt collection company and three of its officers (collectively, “defendants”) for allegedly engaging in passive debt collection in violation of the FTC Act, the...
InfoBytesFTC reaches $62 million settlement with student loan debt relief operation
On November 19, the FTC entered into a settlement with defendants accused of engaging in deceptive practices when marketing and selling student loan debt relief services. As part of its enforcement initiative, Operation Game of Loans (covered by InfoBytes here ), the FTC alleged that the defendants...
InfoBytesFTC says mobile banking app is deceptive
On November 18, the FTC filed a complaint against a mobile banking app operator alleging the defendants violated the FTC Act by deceiving users about their high-interest bank accounts and falsely promising users “24/7” access to their funds. The FTC’s complaint alleges that the defendants...
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FYI
"Data security best practices for licensed lenders' telework" by Sherry-Maria Safchuk and James C. Chou (Law360)
"Educational tools may bring regulatory risk for fintech cos." by H Joshua Kotin, Michelle L. Rogers, and Kathryn R. Goodman (Law360)
"Ruling on anti-hacking law may guide fair lending tests" by Jeffrey P. Naimon and H Joshua Kotin (Law360)
Recent Blog Posts
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January 12, 2021
FTC comments on application of ECOA, Regulation B in response to CFPB RFI
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December 18, 2020
FTC settles with company for data security lapses
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December 18, 2020
FTC settles with mortgage analytics company over vendor oversight deficiencies
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December 17, 2020
Federal and state authorities target income scams
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December 17, 2020
FTC orders social media and video streaming companies to provide data on privacy practices