Editor's Note
The following document provides a monthly roundup summarizing enforcement actions, guidance, rulemakings, and other public statements from the Consumer Financial Protection Bureau, the Federal Trade Commission, and the occasional state regulator regarding the prohibition on unfair, deceptive, or abusive acts or practices (UDAAP) in the marketplace for consumer financial services.
Regulatory Developments
- Department of Justice. Digital Millennium Copyright Act Exemptions. On March 14, 2024, DOJ and FTC jointly submitted a comment to the U.S. Copyright Office advocating regulations that would facilitate consumers' and businesses' right to repair their own products. To that end, the agencies support renewing and expanding certain Digital Millennium Copyright Act exemptions to the prohibition against the circumvention of technology protection measures that control access to copyrighted content.
- Federal Trade Commission. Cross-Government Health Care Inquiry. On March 5, 2024, FTC, DOJ, and HHS jointly issued a Request for Information (RFI) requesting public comment on deals conducted by health systems, private payers, private equity funds, and other alternative asset managers that involve health care providers, facilities, or ancillary products or services. The RFI also seeks information on transactions that would not be reported to DOJ or FTC for antitrust review under the Hart-Scott-Rodino Antitrust Improvements Act. FTC will take comments until May 6, 2024.
- The White House. Higher Education "Junk Fees." On March 15, 2024, the Biden Administration announced a variety of new regulations and rule changes to limit hidden costs and surprise fees that companies and institutions include on customer or student bills.
Enforcement & Litigation
- Federal Trade Commission. Sham Cancer Charity. On March 11, 2024, FTC and 10 states filed a complaint in federal court alleging that Cancer Recovery Foundation International and its operator, Gregory B. Anderson, deceived donors who sought to offer financial support to women battling cancer and their families. The organization claimed that it would use donated funds to help women undergoing treatment for cancer and their families pay for basic needs. Instead, the complaint charges, only about a penny of every dollar donated went to provide such support, while the overwhelming majority went to fundraising and to Anderson himself.
- Federal Trade Commission. Deceptive Marketing. On March 14, 2024, FTC announced that two tech support companies would settle FTC charges that they duped consumers into buying computer repair services in violation of the FTC Act and the Telemarketing Sales Rule. Consumers were lured or alarmed by fake Microsoft Windows pop-ups, which stated that the consumers' computer or system was infected with viruses and urged consumers to "scan" their computers "to avoid more damage." FTC charges that the companies' scans typically identified purportedly serious issues needing immediate attention regardless of the actual health of the consumers' computers. According to the complaint, the companies then urged consumers to purchase software and technical help to "fix" the alleged problems or remove alleged viruses and malware.
Rulemaking Updates
- Consumer Financial Protection Bureau. Credit Card Late Fees. On March 5, 2024, CFPB finalized a rule that lowers the threshold for credit card late fees to $8, with no automatic inflation adjustment, for issuers that have 1 million or more open accounts. Larger card issuers will be able to charge fees above the threshold so long as they can prove the higher fee is necessary to cover their actual collection costs. The new rule goes into effect on May 14, 2024
- Federal Trade Commission. Telemarketing and AI-Enabled Scam Call Protections. On March 7, 2024, FTC announced a final rule extending telemarketing fraud protections to business-to-business (B2B) telemarketing calls and updating the Telemarketing Sales Rule's recordkeeping requirements. FTC also announced a proposed rule that would amend the TSR to cover inbound telemarketing calls involving technical support services.
- Federal Trade Commission. EnergyGuide Labeling Rule. On March 12, 2024, FTC announced the extension of the public comment deadline on a notice of proposed rulemaking concerning the EnergyGuide Labeling Rule from April 2, 2024, until April 19, 2024.
Other News of Note
- Commodity Futures Trading Commission. Precious Metals Fraud. On March 20, 2024, CFTC and FINRA issued an investor bulletin and flier warning people in or near retirement about gold and silver investment scams that tout over-priced metals and coins as "safe investments," but instead charge exorbitant markups, commissions, and fees. In many cases, the transaction costs and ongoing fees make it impossible for victims to ever profit from their investments. The scams also use common affinity fraud techniques, purposefully targeting people with specific political and religious beliefs.
- Department of Financial Protection and Innovation. Buy Now, Pay Later. On March 28, 2024, DFPI warned consumers about the downsides of "Buy Now, Pay Later" (BNPL) plans. These plans split the cost of a purchase into smaller, interest-free installments that you pay over time; but customers may not know that BNPL is a line of credit from an outside company, not an installment program with the retailer. The DFPI warning aims to educate consumers about risks involved in BNPL credit.
- Federal Trade Commission. FTC Imposters. On March 19, 2024, FTC warned the public about scammers impersonating real FTC employees to steal money from consumers. FTC will never send consumers to a Bitcoin ATM, tell them to go buy gold bars, or demand they withdraw cash and take it to someone in person. It will also never contact consumers to demand money, threaten to arrest or deport them, or promise a prize. If someone claims to work for the FTC and makes any of these demands or threats, they are a scammer. FTC provides a link to report scammers to FTC so information can be shared with law enforcement.
Jonathan Cristol is a regulatory analyst with Davis Wright Tremaine LLP.