Industries

E-Commerce - Internet Advertising

Ifrah Law represents businesses and individuals in legal disputes involving Internet advertising and marketing, direct and indirect online sales, electronic-payment processing and interactive gaming.

Through extensive experience, we have developed in-depth understanding of the federal statutes that regulate Internet commerce. Collectively, the lawyers on our team have litigated a wide array of these cases, from defending an online retailer against the fraudulent practices of an unscrupulous marketing agency to preventing the government seizure of an e-payment processing company’s bank accounts.

We have handled a number of high-profile FTC and CFTC investigations and enforcement actions involving Internet marketing campaigns and related issues such as the scientific substantiation of advertising claims.

We also represent companies targeted by state Attorneys General for matters relating to allegedly false or deceptive advertising. In a recent Florida case in which our client received multiple subpoenas from the state Attorney General, we were able to resolve the matter with no finding of wrongdoing or payment of penalties by our client.

Winning Big with a Celebrity Sweepstakes Endorsement

After developing a solid online promotions program over several years with Michelle Cohen advising on sweepstakes and contests, Michelle’s long-standing client, a digital wellness company, decided to energize its online efforts with a celebrity endorsement sweepstakes. The celebrity, a known health advocate and popular entertainer, partnered with our client to give away VIP ticket packages to his sold out shows in multiple cities.

Michelle crafted sweepstakes rules and reviewed promotional materials, including social media campaigns. The celebrity also used social media to organize in-person athletic meet-ups around the country, as part of his current touring schedule. This coast-to-coast campaign included sweepstakes at the on-site events. Michelle worked with our client on several aspects of its campaign, including social media messaging, drafting winner’s eligibility affidavits and ensuring compliance with state and federal sweepstakes laws, as well as social networks’ policies and requirements.

The result? Michelle’s client continues to develop exciting and clever online promotions that will engage their audience, while complying with applicable laws and regulations and maintaining positive relationships with key social networks.

 

Turning the Tables on Fraudulent Direct Marketing Tactics

When an Internet retailer of consumer products discovered fraud by the direct marketing agency it had retained to promote its products online, Ifrah PLLC helped the retailer turn the tables.

Although the direct marketing agency, or affiliate network, agreed to craft a marketing campaign that complied with all advertising and consumer protection laws, it failed to do so. The network drove millions of leads to the retailer, a substantial number of those turned out to be from webpages containing claims the retailer did not approve.

This resulted in a substantial loss of advertising dollars for our client, the possible loss of good will among its customers, and exposure to state and federal consumer protection claims.

After we advised the retailer to stop paying the affiliate network, it filed a breach-of-contract lawsuit in federal court in California seeking $2.5 million in damages. We responded by filing a countersuit for the non-compliant webpages.

In our analysis of the lawsuit, we discovered a legal flaw in the agency’s case that would require the court to dismiss it. Rather than immediately attempt to litigate this issue, we contacted the agency’s lawyers and gave them several opportunities to withdraw the case voluntarily.

When the agency ignored our invitation, we filed a motion to dismiss its lawsuit based on the flawed filings. The judge not only granted our motion, but he also chastised the agency for ignoring our invitations to resolve this without involving the court.

Because our litigation of the motion unnecessarily required our client to incur legal fees, we then filed a request that the judge order the agency to pay our client’s fees. Just as vigorously as it had fought our first motion, the agency fought that request. The judge awarded our client legal fees not only for the motion to dismiss, but also for having to fight its fee request.

In the end, we resolved the dispute in an out-of-court settlement on terms favorable to our client.

 

Domain Name Seizure Reversed, Favorable Settlement Gained

Ifrah Law’s client, a Russian corporation, was charged in the United States District Court
for the District of Columbia with violating the Commodity Futures Trading Commission
(CFTC) Act.

The company is comprised of a group of financial and investment companies that provide
online trading services. The government alleged that the defendants operated a foreign
currency exchange business over the Internet, which served U.S. customers but did not
register with the CFTC, as is required by law. The government was seeking $280,000 in
potential fines and the worldwide shutdown of the lucrative web site.

After the government obtained a default judgment against the defendant, they turned to
Ifrah Law. With our representation and expertise in financial matters, the case was settled
for a small fine and the web site remains operable outside of the United States.

(CFTC v. InstaForex, Case No. 1:11-cv-00188 (U.S. District Court, District of Columbia))

 

A Favorable Settlement for an Online Merchant

A dispute arose between an e-commerce merchant and an interactive advertising agency
involving over $2.5 million in damages. The merchant retained Ifrah Law and we utilized
our experience representing individuals and corporations in the online marketing arena to
negotiate a favorable settlement for the e-commerce merchant and obtain a dismissal of
the case.

The ad agency was a large network that rolled out a sales campaign for the merchant’s
product. They claimed they were owed commissions from the merchant’s sales and
brought a case against our client and sued the individuals associated with the company, as
well.

We argued that they you couldn’t assess liability against individuals for the liability of
the company unless there was a specific basis to do so and we moved to dismiss. The
advertising agency challenged us, and we won a judgment for the plaintiff as well as for
our attorney fees.

Then the advertising agency litigated that result – and lost. The judge found our legal fees
to be fair and reasonable.

By the time this wrangling was completed, Ifrah had won a judgment of $250,000 before
the actual case had even started. Normally, it’s impossible for a defendant to win legal
fees – but not with Ifrah Law.

 

Good Lord, & Taylor! Of Course You Need to Disclose Native Ads

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On March 15, 2016, national retailer Lord & Taylor agreed to settle FTC charges that it “deceived consumers by paying for native advertisements.” The settlement is the first of its kind following the December 2015 guidance memorandum, Native Advertising: A Guide for Businesses, issued by the FTC. Under the terms of the settlement, Lord & Taylor is prohibited from “misrepresenting that paid ads are from an independent source, and is required to ensure that its influencers clearly disclose when they have been compensated in exchange for their endorsements”.

On the day the settlement was announced, the FTC also published a copy of the underlying complaint. The complaint alleges that Lord & Taylor developed plans to promote a clothing line for women which included a comprehensive social media campaign of blog posts, photos, native-advertising editorials in online fashion magazines, and a team of “influencers” recruited for their fashion sense and audience on social media. The FTC alleged that Lord & Taylor edited, pre-approved, and paid for a favorable Instagram post that was uploaded to the account of a fashion magazine called Nylon. The regulatory agency further alleged that Lord & Taylor reviewed, pre-approved, and paid for a favorable article in Nylon. In both cases, however, Lord & Taylor failed to disclose its commercial arrangement with Nylon. Similarly, the FTC alleged that Lord & Taylor gifted a dress from the clothing line to fifty “influencers” who were paid between $1,000 and $4,000 to post favorable photos and comments about the dress on social media. Again, Lord & Taylor did not disclose or require influencers to disclose that they had been paid for their posts. Based on Lord & Taylor’s alleged misrepresentations and failure to disclose, the FTC accused Lord & Taylor of engaging in unfair or deceptive acts or practices in violation of the Federal Trade Commission Act.

What is Native Advertising?

Native advertising, also known as sponsored content, is designed to fit in with original online content in a seamless, non-intrusive manner.  It allows advertisers to directly reach online consumers, without severely interrupting the original content on the publishing website, video game, or mobile app.  In the past few years, this advertising has reached all corners of the internet.

FTC Concerns With Native Advertising

As native advertising has grown, so have the FTC’s concerns about the possibility of deceiving consumers.  Therefore, at the close of 2015, the FTC released the guidance memorandum, Native Advertising: A Guide for Businesses, which provides details and illustrative examples for businesses that use native advertising as part of their online marketing campaigns.

Native advertising creates a particular challenge for advertisers.  Advertisers want to design an advertisement that appears native to the original content, but must do so without potentially confusing the consumer, who may mistake the advertisement for non-advertising content.

To assist advertisers in complying with these rules, the FTC issued its December 2015 guidance memorandum with examples and tips to ensure advertisers remain compliant.  Most of the memorandum focuses on seventeen examples of advertising, including on news sites, in videos, through content recommendation widgets, and in video games.  These examples illustrate how and why consumers might be confused by certain native advertising tactics.  Most of the examples show how a native advertisement might bear too much similarity to the original content, which means the consumer might not understand that what they are viewing is, in fact paid-for, sponsored content.

Complying With FTC Native Advertising Requirements

The take-away from the Lord & Taylor settlement is that advertisers should avoid placing paid ads that appear to be independent editorial content. Put simply, advertisers must choose between control and disclosure. In other words, advertisers who want to make use of native advertising and “influencers” on social media must either relinquish influence or control over the advertising content or disclose the nature of the marketing arrangement. Bottom Line: Paid advertising must be identifiable as advertising.

The FTC’s December 2015 memorandum provides a variety of tips on how to appropriately disclose native advertising.  The disclosures should be three things: (1) placed near the advertising; (2) prominent; and (3) clear.  By ensuring that native advertising follows these disclosure guidelines, companies will avoid misleading consumers into thinking their native advertisement is non-sponsored, publisher content.

Finally, the memorandum specifically notes who is affected by these disclosure rules.  The enforcement is not limited to just the sponsoring advertiser.  Advertising agencies and operators of affiliate advertising networks are also obligated to adhere to the FTC’s disclosure requirements.

Put simply, if a reasonable consumer might see your native advertising and believe it to be non-advertising content, the FTC will likely take issue with your native advertising tactics. This is exactly what we saw in the Lord & Taylor settlement.

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Even Bad Guys Have Rights

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This article first appeared February 29, 2016, on FEE.org – you can access this version here.

Remember Martin Shkreli, the “pharma bro” notorious for raising the price of his company’s life-saving drug by some 5,000 percent? Did you know he was recently arrested for securities fraud (completely unrelated to the drug hike)? It didn’t take long for the Justice Department to go after the universally unpopular rapscallion.

Big government gets a bad rap for being inefficient, but it can cut to the chase rather swiftly when it wants to. In order to stop, or at least dramatically curb, behavior that goes against law or policy — or perhaps just opinion — government enforcement agents know how to employ a show of force and to make an example of someone they deem a wrongdoer. The punishment is public and can be severe.

Setting an Example

A recent show of force can be seen in federal actions against the dietary supplement industry. The industry has exploded in recent years, thanks in large part to the public’s growing love for health and homeopathy. The popularity has, predictably, attracted moneymakers of both the scrupulous and unscrupulous kind.

The government wants to rein in the industry, so to set an example it has come down hard on one company. USPlabs was one of more than 100 makers and marketers of dietary supplements against whom the Justice Department announced it was pursuing civil and criminal cases. But the company had the unfortunate luck to become the government’s example of what it can do to wrongdoers. Not only did the DOJ charge the company; it also indicted several of its executives and froze their assets — from investment accounts to homes to automobiles.

Do the Ends Justify the Meanness?

The government’s heavy hand on USPlabs is the kind of crackdown you expect against organized crime or large drug rings. What were the criminal defendants at USPlabs alleged to have done? Not exactly Sopranos-level stuff: importing ingredients with false certificates of analysis and false labeling, misrepresenting the source and nature of product ingredients, selling products without determining safety, and continuing to sell products after they told agents they would stop.

If the allegations are true, the defendants’ actions were wrong. But public arrests and asset seizure are extreme. How often do people accused of false labeling get perp walked? The DOJ’s tactics look like shock-and-awe theater for the benefit of others.

If there is any doubt whether the government wanted to use its hard-line approach against USPlabs as an example for other companies, look no further than this statement by FDA Deputy Commissioner Howard Sklamberg: “The criminal charges against USPlabs should serve as notice to industry that if products are a threat to public health, the FDA will exercise its full authority under the law to bring justice.”

In other words, makers and marketers of dietary supplements: beware!

So What?

You may think the Justice Department performed a public service by coming down so hard on Shkreli and USPlabs. Why should we care if the government crushes some scalawags and discourages others in the process?

What if the government’s show of force comes at the cost of a defendant’s due process rights? Shkreli has said that the feds targeted him because of the drug price hike, looking for anything to stop him. Now he’s been fired and his company has filed for bankruptcy. That’s a pretty high price to pay for being obnoxious.

While deterrence may be an acceptable basis for punishment, it doesn’t justify punishment that exceeds the crime. Arresting executives and seizing their personal bank accounts, homes, and cars in an instance like this is excessive. More commonly in cases like USPlabs, prosecutors will settle with the company, levy a fine against it, require it to institute controls to avoid further wrongdoing, and perhaps require it to be monitored for a while to ensure controls are being observed.

Going after the individual executives as if they were Mafia kingpins goes beyond the pale. Freezing or seizing assets is something that prosecutors more commonly do when those assets are being used to carry out criminal behavior, or when there is a great risk those assets will be disposed of before judicial proceedings. Chances are slim that the executives in the USPlabs matter were planning on liquidating their family homes or cars.

Yet Another Slippery Slope

For those who think the government is on the right side in its show of force, ask yourselves whether the government isn’t pursuing its initiatives (even reasonable initiatives like reining in fraud) a bit brutishly. Making an example of an alleged wrongdoer even before the wrongdoer’s day in court harkens back to techniques used by conquerors in days of old who put heads on pikes to show the subjugated just who was in charge.

And what if the government decides to crack down on behavior not so clearly reprehensible? Say the government decides to put speeding in check by jailing a few folks going modestly over the limit. How many of us would feel safer?

Even when we dislike the targets of prosecutorial zeal, supporting justice is in our self-interest. When the government sets aside due process and proportionality to set an example of other would-be wrongdoers, they are sacrificing justice for the sake of regulatory expediency.

 

The post Even Bad Guys Have Rights appeared first on Crime In The Suites.

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Amazon Pursued Fake Reviews In 2015, What Will It Pursue In 2016?

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In 2015, Amazon filed suit against over 1,000 unnamed individuals for allegedly offering to sell fake online reviews (positive or negative) on Fiverr.com (“Fiverr”). The unnamed defendants offer to provide 5-star reviews and some defendants even encourage sellers to provide their own text to use in the review. In order to avoid detection, defendants offer to submit reviews from multiple IP addresses, utilize multiple Amazon accounts, and to complete a Verified Review (which means the reviewed has purchased the product, even though they don’t always require the actual product to be shipped for review). In short, the allegations are that these reviews for sale violate Amazon’s Customer Review Guidelines (which prohibit paid reviews), Fiverr’s own Terms of Service (which requires compliance with third party guidelines), and deceptively provides false reviews to consumers (which violates consumer protection laws).

Interestingly, Amazon did not name Fiverr as a party to the complaint. Instead, Amazon went after the individual sellers and indeed explicitly stated in the complaint that “Amazon will amend this complaint to allege their true names and capacities when ascertained.”

In contrast to Amazon’s approach, the Metallica Plaintiffs in a previously filed case against Napster, sued Napster directly and not the individual users (and eventually obtained their desired result).  Indeed, Amazon has not always omitted operators from its case captions. Last April, Amazon filed a similar lawsuit against a number of companies that operated websites to promote the sale of Amazon reviews. That lawsuit contained very similar allegations to this recent suit against individuals and alleged selling positive reviews, offering a Verified Review, a slow posting of reviews to avoid detection by Amazon, etc. Similar as well to the Napster case, the first Amazon lawsuit also yielded a successful result because the websites targeted in that case were all closed down.

So why is Amazon now going after the individual sellers? And why did Amazon omit Fiverr in this lawsuit?

One possible explanation is that Amazon, like Napster, first attempted to take down the providers (i.e. the website owners) that enabled the fraudulent review process. While that was successful, Amazon likely realized that it was insufficient because the individual reviewers would easily migrate to sites like Fiverr to continue their activities. So, Amazon was forced to file suit against the individual users.

At the same time, Amazon did not include Fiverr as a named defendant because it is more likely to get Fiverr’s cooperation in providing the identities of the unnamed defendants, and, because Fiverr is a legitimate global online marketplace offering tasks and services- in sharp contrast to the defendants in the prior Amazon lawsuit that operated sites and companies for the sole purpose of providing fraudulent Amazon reviews (and further antagonized Amazon by utilizing the Amazon logo on their sites). Additionally, as noted in the current Amazon complaint, Fiverr itself prohibits paid reviews and has tried to prevent them- again in sharp contrast to the companies in the first Amazon lawsuit, whose entire business was selling Amazon reviews.

Or it may be that Amazon has embarked on a process to stop paid reviews and these are the first steps in that ongoing process. As noted in this complaint against the Fiverr sellers, the lawsuit is “the next step in a long-term effort to ensure these providers of fraudulent reviews do not offer their illicit services through other channels.” Thus, Amazon may have simply first pursued the enablers (i.e. the company websites dedicated to fraudulent reviews) and then it pursued the individual reviewers on Fiverr.

The extent to which Amazon will continue to pursue questionable reviews remains to be seen. In 2015, Amazon limited its lawsuits regarding fraudulent reviewers to paid reviewers. In 2016, we may see an assault on the groups of independent people who exchange positive reviews on Amazon (i.e. each party agrees to submit a positive review of the other’s product). This type of arrangement also violates Amazon terms and poses similar concerns to the reliance of consumers on Amazon reviews. Amazon may also question whether this prohibited practice merits attention.

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Will The Floodgates Open As Consumer Backlash To Spam Unleashes?

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Every e-mail user receives them, some days in numbers hitting the triple digit mark – those targeted, often annoying and unsolicited e-mails that clog our inboxes, originating from any of a multitude of establishments, including retailers, service establishments, and even our own social media.  Regulation over unwanted e-mails has been limited mostly to the federal Can Spam Act of 2003, which doesn’t prohibit the deluge of e-mails, but rather protects against misleading and deceptive ones and requires the sender to comply with certain requirements, including offering a clear opt-out. A private consumer has limited retribution to enforce the Act, however, and must rely on the FTC, as well as other government entities and Internet service providers, to bring suit to stop the unwanted e-mails. It seems that consumers in recent years are ever more fed up and frustrated with “spam” messages and desire change.  However, as evidenced by a recent class action lawsuit by certain LinkedIn members against the social media giant, consumers may utilize other legal maneuvers to get relief from new marketing tactics employing spam.

LinkedIn is often referred to as the “Facebook of the Professional World.”  With over 300 million+ users, LinkedIn has become the world’s largest professional network since it launched in 2003.  One feature of the network allows a member to import his or her e-mail contacts list and send invitations to connect with others on LinkedIn.  A user is prompted by LinkedIn to click an “Add Connections” link, which then allows LinkedIn to import the list from external e-mail accounts.  LinkedIn uses this feature to grow its number of members.

According to the class action lawsuit filed against LinkedIn, if a connection invitation was not accepted within a certain period of time, up to two “reminder’ spam e-mail messages would be sent to the prospects, without the LinkedIn member’s consent to do so. In Perkins v. LinkedIn Corp., the federal district court in the Northern District of California determined that the motion to dismiss filed by LinkedIn would be granted in part and denied in part, thereby allowing the suit to move forward.  In its partial denial of the motion to dismiss, the court reasoned that although the members consented to importing their contacts and sending the invitation to connect, they did not consent to sending the reminder messages on their behalf.  In her Order, Judge Lucy Koh explains,

“Nothing in LinkedIn’s disclosures alerts users to the possibility that their contacts will receive not just one invitation, but three. In fact, by stating a mere three screens before the disclosure regarding the first invitation that ‘We will not . . . email anyone without your permission,’ LinkedIn may have actively led users astray.”

(Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss with Leave to Amend *30).  The plaintiffs also contended that LinkedIn members did not consent to the use of their names and likenesses in the reminder e-mails and were embarrassed and felt that the unwanted e-mails sent to personal contacts affected their professional reputations.

Following the court’s Order, the parties agreed to settle the suit.  The settlement requires the social media giant to pay at least $13 million, as well as  $2.25 million in legal fees, to LinkedIn members who had accounts between Sept. 17, 2011 and Oct. 31, 2014 and sent e-mails through the Add Connections feature. Although LinkedIn did not admit any wrongdoing in the settlement, it agreed to revise its disclosures and clarify that the reminder e-mails would be sent as part of the “Add Connections” service. LinkedIn also indicated its intent to provide an option to cancel the connection invitation, and thereby the reminders, by the end of the calendar year.

Interestingly, with perhaps the fear of a lawsuit on the horizon, Mark Zuckerberg preemptively announced at a recent town hall meeting held in Delhi, India, that Facebook will be reducing the number of invitations it sends to outside contacts of players of the game Candy Crush Saga. Facebook often sends the invitations to contacts who have never used a game and never played games on Facebook, suggesting that they join their friends in a Candy Crush Saga game.  Zuckerberg noted that reducing the number of invitations received was the most upvoted question in an online thread, and he has promised to reduce the number of these unwanted requests.  After the recent LinkedIn settlement, we advise Mr. Zuckerberg to take action swiftly or we may see other unhappy consumers following suit. . . .  with their own suit!

These developments should offer welcomed relief for consumers and our busy delete buttons. However, this may be the tip of the iceberg with regard to the use of the courts and unwanted e-mails. Is the broad Can-Spam Act sufficient to deter spammers? Does the Can-Spam Act do enough to filter out unwanted e-mails? New scenarios have arisen since the enactment of the Act in 2003 and consumers seem to desire more regulation to deter the deluge of e-mails. If swift action isn’t taken by Congress and other regulators, it seems that consumers may take to the courts to set precedent in this ever-changing arena.

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Highlights And Takeaways from the October 30th FTC Lead Generation Workshop

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Exploiting consumers and exploiting consumer data were popular themes in the FTC’s October 30th workshop on lead generation, “Follow the Lead.” The day-long workshop explored the mechanics of lead generation and its role in the online marketplace. With a focus on the lending and education spaces, panelists discussed the many layers of marketing involved in lead generation—and importantly—how those many layers can add confusion to how consumer data gets collected, sold, used … and misused.

Panelists of the five workshop sessions hailed from industry, government, advocacy groups, and research institutions. They offered insights into both the vulnerabilities and opportunities flowing from the extensive “behind the scenes” market of lead generation. But unsurprisingly, the benefits of lead generation were overshadowed largely by attendant concerns: why is so much consumer data collected, what is done with it, and are consumers aware of how their personal information is being traded and used?

The workshop included two “case study” panels on lending and education. For the panel on lead generation in lending, Tim Madsen of PartnerWeekly provided an overview of how the “ping tree” model works. Connecting prospective borrowers with lenders through a reverse auction of borrower leads, the “ping tree” model may be an efficient way of matching borrowers and lenders. However, Pam Dixon, Executive Director of World Privacy Forum, highlighted her concerns that lenders are receiving consumer data that would otherwise be protected under the Equal Credit Opportunity Act and therefore that the online process is circumventing important consumer protection laws. For instance, the online lending process may require certain personal information from borrowers in order filter fraudulent requests. But that personal information (e.g., gender or marital status) otherwise could not be part of the loan application process. Dixon felt the disclosure of protected information was one that needed to be addressed from both a technical and a policy standpoint. And it is an issue she raised on subsequent panels during the conference, indicating a possible pressure point for future regulatory action.

The panel on lead generation in education was highly charged, due to the controversial nature of marketing higher education and due to the negative attention on for-profit education. Despite many people’s assumption that online marketing in education is largely a tool of the for-profit education industry, Amy Sheridan, CEO of Blue Phoenix Media, provided some surprising statistics: state and private institutions represent roughly forty percent of her business in the education vertical. Even renowned schools like Harvard and Yale are employing lead generation to gain students in their programs.

But given the extensive access to federal funds through higher education, consumer advocates highlighted concerns over students being preyed upon by unscrupulous educators. Jeff Appel, Deputy Undersecretary of Education at the Department of Education, attributed the problem in part to the lack of underwriting in federal student loans. [Query: Wouldn’t it make sense to add underwriting to the federal student loan process? Statistically, private student loan repayment fares much better thanks to this preliminary screening.]

In support of responsible advertising for educational programs, Jonathan Gillman, CEO of Omniangle Technologies, identified the need for clear guidance on appropriate marketing tactics, which may better address problems than resorting to law enforcement. He pointed out the adverse consequences of clamping down on educators’ online advertising: educators are now afraid to advertise online and that space is being filled by affiliates who are more apt to cross the line into deceptive advertising.

Appel provided some general guidance for schools working with lead generators. Schools should (1) monitor how lead generators are representing programs and ensure their ads are not deceptive, (2) make sure payment for advertising does not implicate regulations against incentive-based compensation, and (3) be aware that the actions of lead generators may come under the Education Department’s purview if they are providing additional assistance (e.g., processing student applications).

Both Appel and consumer advocates seemed to agree, though, that laws and regulations already in place were sufficient to address consumer protection concerns in the education marketing space. It is only a matter of having the resources to enforce those laws and regulations. Appel also suggested that state regulators could curb issues by better screening schools.

Throughout the day and across the panels, FTC representatives turned to the concept of “remnant information,” i.e. consumer information that is longer being used. FTC attorney Katherine Worthman asked panelists various questions about what ultimately happens to this information. R. Michael Waller, another FTC attorney and panelist, noted his concern that companies have an economic interest in maintaining and possibly selling remnant information, and that such information is increasingly vulnerable to fraudsters. These FTC attorneys thus pressed about policies on consumer data retention. Aaron Rieke of Upturn supported the FTC concerns and noted that nothing in the company privacy policies (that he’s reviewed) prevents the sale of consumer data:  “privacy policies are shockingly permissive when you look at how much information is being provided.”

Another popular issue was whether and to what extent disclosures to consumers are sufficient: are consumers aware of how their information is being traded? The general consensus among panelists was that consumers remained ignorant to the sale and use of the personal information they provide online.

Upshot from the workshop: Lead generators, and the companies using them, should be aware of the growing interest by federal regulators in (1) how consumer data is being collected, retained, and sold and (2) the extent to which people up and down the online marketing supply chain are vetting the buyers and sellers of consumer data. Other takeaways from the conference: Companies should ensure their data collection and retention policies comply with applicable state and federal law. Finally, it is important for companies to ensure their practices comply with both their policies and their disclosures.

 

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Happening Now

Tuesday, Apr 25, 2017

Ifrah Law’s Jessica Feil to Speak at GiGse 2017

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