On October 31, a federal jury in the U.S. District Court for the Western District of Missouri found the defendants, a trade association, which represents residential and commercial real estate industries, and multiple residential brokerages liable for $1.8 billion in damages for conspiring to artificially inflate commissions on home sales. Continue Reading Federal Jury: Trade Association and Real Estate Brokerages Conspired to Inflate Commissions, $1.8B in Damages to Plaintiffs
FTC
CFPB, FTC, California Make Significant Moves on “Junk Fees”
A number of state and federal regulators, bolstered by messaging from the Biden administration, have embarked on a concerted campaign to address so-called “junk fees.” Continue Reading CFPB, FTC, California Make Significant Moves on “Junk Fees”
FTC Judge Orders Tax Filing Software Company to Stop Advertising Products as “Free”
On September 8, the FTC’s Chief Administrative Law Judge (“ALJ”) issued an initial decision finding that a company providing tax filing software services engaged in deceptive advertising practices in violation of Section 5 of the FTC Act. In March of 2022, the FTC filed an administrative complaint alleging that the company’s advertisements misled consumers into believing that any user could file their taxes for free on the company’s platform, when in reality, the free service offerings were only available to approximately one third of tax filers.Continue Reading FTC Judge Orders Tax Filing Software Company to Stop Advertising Products as “Free”
FTC Settles FCRA Suit Against “People-Search” Companies
On September 11, the FTC announced that it had reached a settlement with two “people-search” companies which would resolve charges that the companies had engaged in practices that violated the Fair Credit Reporting Act (“FCRA”). The California-based defendants market “people-search” services, allowing users to search unlimited background reports on individuals, and charge monthly subscription fees to view the full reports. Searches can be run using an individual’s name and/or city and state of residence.Continue Reading FTC Settles FCRA Suit Against “People-Search” Companies
FTC Publishes INFORM Act Guidance for Third Party Sellers
On August 18, the FTC published guidance for third party sellers detailing how the INFORM Consumers Act, which took effect on June 27, may impact their businesses. The INFORM Act provides that online marketplaces where high-volume third party sellers offer new or unused consumer products must collect, verify, and disclose certain information about those sellers. Online marketplaces must also offer a clear mechanism for consumers to report suspicious activity.Continue Reading FTC Publishes INFORM Act Guidance for Third Party Sellers
FTC Reaches Settlement with Crypto Platform
On July 13, the FTC issued a press release announcing that it had reached a settlement with a bankrupt crypto platform. The New Jersey based company, which filed for bankruptcy in July 2022, marketed a variety of cryptocurrency products and services to consumers including interest-bearing accounts, personal loans secured by cryptocurrency deposits, and a cryptocurrency exchange. According to the FTC, the company and its executives induced consumers to deposit cryptocurrency by deceiving users and falsely promising access to deposits, high yields, and deposit security. The FTC complaint alleges that rather than securing these deposits, the platform took title to and misappropriated deposits totaling more than $4 billion. Specifically, it is alleged that the company used consumer deposits to fund operations, pay rewards to other customers, borrow from other institutions, and make high-risk investments. As the fiscal health of the company declined, executives concealed the fiscal condition of the company all the while protecting themselves by withdrawing significant sums of cryptocurrency from the platform two months before the company filed for bankruptcy.Continue Reading FTC Reaches Settlement with Crypto Platform
FTC Notifies Online Marketplaces of Obligations Under INFORM Act
On June 20, the FTC announced that it has sent letters to 50 online marketplaces nationwide notifying them about their obligations to comply with the new Integrity, Notification, and Fairness in Online Retail Marketplaces (“INFORM”) for Consumers Act, which is set to take effect on June 27, 2023. A template sample of the FTC’s letter can be accessed here.Continue Reading FTC Notifies Online Marketplaces of Obligations Under INFORM Act
Reminder: The FTC “Safeguards Rule” Compliance Date is June 9
The FTC’s Safeguards Rule compliance deadline is right around the corner – June 9. The Safeguards Rule requires non-banking financial institutions to develop, implement, and maintain a comprehensive security program to keep their customers’ information safe (we discussed the Safeguards Rule in a previous blog post here).Continue Reading Reminder: The FTC “Safeguards Rule” Compliance Date is June 9
CFPB, FTC Continue Crack Down on Debt Relief Schemes
On May 5, the CFPB announced that it has sent payments totaling more than $22 million to approximately 6,500 individuals who were harmed by a Maryland-based debt-relief and credit-repair company that marketed and sold debt-relief and credit-repair services nationwide from 2016 to 2020. In 2021, a federal court entered a stipulated final judgement and order against the company and its executives for allegedly deceiving consumers into hiring the company with false promises to lower or eliminate their credit-card debts and to improve their credit scores in violation of consumer financial protection laws.Continue Reading CFPB, FTC Continue Crack Down on Debt Relief Schemes
Federal Regulators Remain Focused on AI-based Discrimination
On April 25, the CFPB, FTC, EEOC, and Civil Rights Division of the DOJ issued a joint statement outlining the agencies’ collective commitment to monitor the development and use of automated systems and artificial intelligence and enforce their respective authorities where such systems produce outcomes that result in unlawful discrimination. The joint statement explains that potential discrimination in automated systems can come from different sources, including:Continue Reading Federal Regulators Remain Focused on AI-based Discrimination