IN THE NEWS AND LATEST UPDATES
Get these and other stories in real time when you subscribe to the Ad Law Access blog here or visit the Advertising and Privacy Law Resource Center here.
Junk fees have made, and continue to make, state attorney general headlines with recent actions by Maryland and Rhode Island relating to consumer transportation. The rubber met the road when Maryland Attorney General Anthony Brown brought charges against a car dealership and its owners, and Rhode Island Attorney General Peter Neronha filed a lawsuit against a parking management company.
LegalZoom makes various #1 claims, including that it is the “#1 choice for online small business formation,” that it is “#1 rated by small businesses,” and that is “voted #1 by small businesses.” ZenBusiness challenged these claims in the same case we wrote about yesterday. In some industries, companies can look to empirical third-party data (such as sales data) to support these types of claims. When that doesn’t exist, companies are left to find their own support. NAD’s decision show how tricky that can be.
LegalZoom has a box on its website with the title “As Seen In” followed by the logos of five publications that have featured its services. In an NAD challenge, ZenBusiness argued that because LegalZoom has an affiliate relationship with some of those publications, it needs to disclose its connections to them in order to comply with the FTC’s Endorsement Guides. LegalZoom argued that mere press mentions don’t qualify as endorsements and, therefore, that a disclosure isn’t required.
Yesterday, the Federal Trade Commission announced its final rule addressing consumer reviews and testimonials. With this rule, the Commission takes aim at “fake” reviews and testimonials by prohibiting their sale or purchase and allows the agency to seek civil penalties against “knowing” violators.
On August 7, 2024, the Federal Communications Commission (FCC) adopted a Notice of Proposed Rulemaking and Notice of Inquiry related to the use of artificial intelligence in outbound calls and texts. Among the proposed rules are a definition of an “AI-generated call” and disclosure requirements for placing such calls. This item is the latest in a series of actions taken by the FCC this year under its authority to implement the Telephone Consumer Protection Act (TCPA) and demonstrates the agency’s continued focus on what it says is the “top category of consumer complaints that [it] receive[s].” Initial comments on the proposed rules will be due 30 days after the item is published in the Federal Register, and reply comments will be due 15 days thereafter.
If you’ve watched the news recently, it’s fairly safe to predict that two things happened. First, you probably watched an announcer recount disturbing news about the current political climate. Second, following that segment, you probably watched a celebrity recount the benefits of using CarShield. (If your experience is different than mine, please let me know, so that I can change my viewing habits.) Although both of those things may continue to happen for a while, you may soon see some changes to the CarShield commercials.
In June, we summarized a number of new and pending laws specifically designed to regulate how companies display prices and fees. Although it’s important for companies to focus on those, we also noted that even in states without specific laws on point, enforcers could still rely on laws that more generally outlaw deceptive and unfair acts and practices to challenge how companies display their prices. A new lawsuit filed this week by the DC Attorney General against StubHub provides yet another perfect example.
In 2015, plaintiffs filed a lawsuit against Ashley Madison, alleging that the company had surreptitiously employed an “army of fembots” to lure unsuspecting men into cheating on their spouses. (You can read our coverage of that case and related warnings here.) Not satisfied with having broken up countless homes, the bots are back, and this time they’re trying to lure people away from their money. At least that’s what Skillz Platform alleges in a false advertising lawsuit against its competitor, Papaya Gaming.
“Up to” claims can be difficult to substantiate, in part, because the standard for substantiating those claims isn’t always clear. Over the years, the FTC, NAD, and courts have articulated different standards that are hard to reconcile with each other. For example, last month, we posted about a decision in which a three-judge panel with the Ninth Circuit determined that an “up to” claim reflected the “upper limit” of what consumers could expect and rejected the plaintiff’s assertions that consumers should “always” expect that. This month, the FTC announced a settlement that takes a different view.
Cameo is a platform where people can pay celebrities to record videos with scripted personal messages. Jimmy Kimmel recently used the platform to see if he could get George Santos to say silly things and then Kimmel aired those videos on his late night show. Santos later sued Kimmel, accusing him of copyright infringement, and the two are battling that out in court. But today, it’s Cameo that finds itself in a legal battle.
Late last week, the Consumer Financial Protection Bureau (CFPB) released a proposed interpretive rule asserting that paycheck advance or earned wage access (EWA) products are considered consumer loans and therefore subject to the Truth in Lending Act (TILA), irrespective of whether the products are provided through employer partnerships or marketed directly to borrowers. The new interpretive rule, which unlike substantive rules issued under the APA do not impose new legal requirements or have the force and effect of law, explains how existing law (TILA and Regulation Z, specifically) apply to the increasingly popular financing option and replaces a 2020 advisory opinion issued in the Trump administration.
Last week, a Florida consumer filed a putative class action against Lululemon, alleging that the company’s “Be Planet” campaign “goes too far by creating the general, express, and implied impression in consumers’ minds” that the company is contributing to a healthier planet when, in reality, the company is “causing significant damage to the environment, which is only on track to get worse.”
