On September 15, the FTC released a report, Bringing Dark Patterns to Light, that shows an increase in the use of sophisticated “dark pattern” design practices by retailers intended to manipulate consumers into making decisions that benefit the retailers at the consumers’ expense. The report examined the use of dark patterns across a variety of industries and contexts, including e-commerce, cookie consent banners, children’s applications, and subscription sales. The report highlighted four common tactics:

Continue Reading FTC Reports Rise in “Dark Pattern” Tactics in Consumer Markets

On September 1, the FTC issued an administrative complaint and consent order alleging that a credit services company harmed consumers by making false claims of “pre-approved” credit offers, enticing many consumers to apply for offers they ultimately did not qualify for and unnecessary credit checks.

Continue Reading FTC Targets Credit Services Company For False “Pre-Approved” Credit Offers

The FTC recently published an advance notice of proposed rulemaking to discuss harms associated with the collection, processing, and selling of personal data. The FTC is inviting public comments on whether it should implement new rules on how companies:

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On August 9, the US District Court of Georgia ruled that the FTC had provided “broad and detailed evidence” for its allegations that a tech company and its CEO engaged in deceptive advertising and unfair fee practices in violation of Section 5 of the FTC Act. The FTC’s 2019 complaint alleged the defendants made deceptive representations to customers and charged hidden, unauthorized fees in connection with the company’s “fuel card” products, including by:

Continue Reading Court Orders Injunctive Relief Against Tech Company for Deceptive Advertising, Unfair Fee Practices

On August 10, the CFPB issued a consent order against a FinTech company for a faulty algorithm utilized in its personal finance management app that caused consumer accounts to overdraft and incur overdraft penalties. According to the CFPB, although the San Francisco-based fintech company promoted the app as a savings tool for consumers, it engaged in deceptive acts or practices in violation of the CFPA by:

Continue Reading CFPB Targets FinTech for Faulty Automated Savings Algorithm

On July 29, a payment processor company and its two sales affiliates (defendants) agreed to a stipulated order with the FTC to settle charges that they imposed hidden terms, surprise exit fees, and “zombie charges” on small businesses.

Continue Reading Payment Processor Agrees to Refund Customers After FTC Alleges Surprise Exit Fees and Zombie Charges On Small Businesses

On July 27, the CFPB and DOJ proposed a settlement with a nonbank mortgage lender for its discriminatory “redlining” lending practices against minority families living in the greater Philadelphia area. If approved by the court, the mortgage lender would be required to pay more than $22 million in civil penalties, and would be the CFPB’s first nonbank mortgage redlining settlement.

Continue Reading CFPB, DOJ Propose $22 Million Penalty Against Nonbank Mortgage Lender for Illegal Redlining

On June 29, a Florida court issued a final judgment against a Miami-based payday lender and its CEO resolving allegations that the defendants misappropriated investor funds. According to the complaint, the business fraudulently raised upwards of $66 million through the sale of promissory notes to more than 500 Venezuelan-American investors who were told that the company would use their funds to finance payday loans through the offer and sale of “safe and secured” promissory notes. Investors were promised returns of up to 120%, yet it was alleged that the company did not generate revenue to cover its principal and interest payments due to investors.

Continue Reading Payday Lender Ordered to Pay $39 Million in Misappropriated Funds Suit

On June 9, the CFPB filed a complaint and proposed order in California federal district court seeking final judgment against the owner of a student loan debt relief company for allegedly withdrawing more than $240,000 from the bank accounts of student borrowers without authorization.

Continue Reading CFPB Targets Student Loan Debt Relief Scam Reboot

On June 2, the FTC was granted a federal court order permanently barring a merchant cash advance operation and its owner from engaging in further deceptive practices and granting restitution to the customers the company harmed. The defendants offered alternative small business financing by purportedly providing funds to businesses in exchange for a percentage of future revenue. According to the FTC, however, the defendants frequently deceived small businesses and their owners, lying about terms and fees for their financing. The websites falsely claimed that cash advanced required no personal guaranties of collateral while the contracts did include such requirements. The merchant cash advance company also required businesses and owners to sign confessions of judgment, which allowed the company to obtain uncontested judgments in cases of alleged default, and which the defendants sometimes used to illegally and improperly seize consumers’ assets. Customer businesses often received thousands of dollars less funding than promised. The FTC further alleged that the defendant company and owner threatened physical violence when the businesses were unable to pay. Finally, the company is accused of providing false documents to the court during proceedings.

Continue Reading FTC Captures $2.7 Million in Restitution from Small Business Financer