The first day of LeadsCon 2014 sessions ended on a rather serious note. Instead of listening to cutting-edge marketing strategies and the newest lead gen techniques, attendees heard about an equally important topic: the latest in consumer protection regulations and how those could impact the lead generation business.
Moderated by Jonathan Pompan, a partner with Venable LLP, “Staying Current with Consumer Protection: Practical Lessons from Recent Enforcement Actions” delved into what government agencies zero in on in terms of potentially misleading advertising and marketing practices aimed at consumers.
First the good news: According to Natalie Williams, assistant litigation deputy, office of enforcement at the Consumer Financial Protection Bureau (CFPB), the agency has not taken any actions involving lead generation. Instead, its primary concern is deceptive advertising. To illustrate, she detailed a case her agency took against Amerisave Mortgage Corp. that resulted in the company paying a $20.8 million penalty.
CFPB found that Amerisave misled consumers into believing they could get a low rate by offering mortgage rates based on a FICO score of 800. Only later did consumers with lower credit scores find out their mortgage rates would be much higher than what was posted on display ads on the company’s website, Williams said.
Such actions may become more common. Alexandra Megaris, an associate at Venable LLP, advises clients in the arena of advertising, marketing and consumer protection law. At one time, the bulk of her work involved compliance matters. Now, much of her work centers on defending clients who have had enforcement actions brought against them by government agencies, such as the Federal Trade Commission (FTC). “The FTC is pursuing more actions,” she said. “It has a lot of muscle and it’s using it.”
Roberto Anguizola, assistant director of the division of marketing practices, FTC Bureau of Consumer Protection, said that it’s unlikely his agency would take any action against a company for a “simple mistake.” The cases it does pursue are those where there is evidence the company “very well knew” it was intentionally defrauding consumers. “These are not accidents,” he said.
What the FTC reviews is the net impression a consumer takes away from an advertisement, Anguizola said. Even if there are nuggets of truth in the ad, if the overall impression is deceptive, then that would be something the FTC would investigate.
David Morgan, chief revenue officer at PerformLine, a compliance software company, stressed that simply looking at a website one time “is not monitoring. Monitoring has to be done every day…It’s not a set-it-and-forget it” program.
To stay in compliance, Megaris advised companies to identify the laws under which they operate, spot any potential issues and then find the resources to address those issues. Other good measures to have in place are written policies and procedures, employee training programs and a strong auditing system. “Don’t wait until the FTC shows up,” she said.