Key Takeaways:
FTC’s Secures $18.5 Million Settlement With Publishers Clearing House for Alleged Dark Pattern Sweepstakes Tactics
Key Update:
- Publishers Clearing House (PCH), a direct marketing company known for its sweepstakes, has agreed to pay $18.5 million as part of a settlement with the Federal Trade Commission (FTC).
- The settlement follows allegations of deceptive practices, such as the use of “dark patterns” to encourage sweepstakes entries and purchases.
- As part of the settlement, PCH agreed to redesign its user interface in order to avoid confusion and ensure transparency.
INFORM Act Addresses Online Marketplace Transparency With Harsh Penalties for Noncompliance
Key Update:
- The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Act or the Act) aims to increase transparency in online transactions and discourage the sale of stolen, counterfeit, or unsafe items through online marketplaces.
- Online marketplaces must comply with key requirements in the Act by June 27, 2023, to avoid penalties for noncompliance.
Old Navy Faces Lawsuit for Allegedly Creating False Sense of Urgency in Sales Emails
Key Update:
FTC Proposes New Rules for Subscription Services—Public Comments Now Open!
The FTC published the proposed Negative Option Rule (Rule) to the Federal Register on April 24, 2023, with the goal of preventing unfair and deceptive practices related to recurring subscriptions for products and services. The FTC has invited the public to comment on proposed changes to the Rule. Written comments must be submitted by June
National Advertising Division Expands Fast-Track SWIFT Process for 2023
Key Update:
- The National Advertising Division (NAD) updated its Fast-Track SWIFT process (Single Well-defined Issue Fast Track) to accommodate “implied” claims as long as they are clear cut and involve a single issue.
- In 2020, the NAD launched its Fast-Track SWIFT resolution process, promising to resolve single-issue cases within 20 business days (as opposed to approximately three months in a standard NAD case). For an overview of the process, see our blog.
Previously, the SWIFT track was only used for express claims, and NAD frequently rejected SWIFT treatment for challenges to implied claims. The process, however, is now expanded to include “misleading express and implied claims.” NAD hopes that by making the change it will reduce the number of disputes over SWIFT jurisdiction that revolve around whether the contested claim is express or implied.
Continue Reading National Advertising Division Expands Fast-Track SWIFT Process for 2023
FTC Proposes Rulemaking for Recurring Subscription Programs
The Federal Trade Commission (FTC) recently announced a notice of proposed rulemaking to expand its “Negative Option Rule” to apply to all recurring subscription programs (Proposed Amendment). The Proposed Amendment would have a sweeping effect on recurring subscriptions, requiring—similarly to some state laws—clear and conspicuous disclosure of material terms, double opt-ins for sign-ups, a simple cancellation method, and an annual renewal reminder. If approved, the Proposed Amendment would set a nationwide floor by requiring specific practices for subscriptions, but it would not supplant existing state laws addressing recurring subscriptions. The amendment would also greatly expand the FTC’s ability to seek penalties and consumer redress for violations.
Continue Reading FTC Proposes Rulemaking for Recurring Subscription Programs
FTC Settlement With NutraClick Reimburses Customers Nearly $1 Million for Recurring Subscription Practices
Key Update:
- The Federal Trade Commission (FTC) has used a $1 million settlement with NutraClick to reimburse customers who allegedly believed they were receiving free products but were actually enrolled in an unwanted monthly subscription program.
FTC Targets Lasik Eye Correction Promotional Pricing With $1.25 Million Settlement Order
Key Updates:
- LCA-Vision, d/b/a LasikPlus and Joffe Medicenter, has agreed to pay $1.25 million to settle the Federal Trade Commission’s (FTC) allegations that it misrepresented the price of eye surgery to entice prospective customers.
- According to the FTC’s allegations, only a small percentage of patients qualified for the promotional rate.
- In addition to the monetary fine, the clinics are prohibited from misrepresenting the cost of surgery or omitting restrictions on advertised services.
Keep Your New Year Happy and Bright With These Ad Law Tips
Another new year begun, so it’s time for retailers to revisit advertising and marketing law compliance strategies to avoid class actions, regulatory enforcement actions, and competitor challenges. We share our picks for the top five U.S. marketing law topics that deserve your attention in 2023.