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Operators of the LendEDU website entered into a settlement agreement with the Federal Trade Commission (FTC) in response to allegations that LendEDU misled consumers by claiming that its website provided objective, unbiased rankings of financial products, when in fact they offered better ratings to companies that paid for the endorsement.

LendEDU promoted its website as a resource for people to compare and shop for financial products, such as student loans, personal loans, and credit cards, using rankings that LendEDU claimed were based on “objective,” “honest,” “accurate,” and “unbiased” information about the quality of the product being offered, and not based on financial compensation. But, according to the FTC’s complaint, LendEDU solicited payments from financial service companies in exchange for better product ratings, and adjusted the rankings on its website based on the amount of compensation received. The FTC complaint also alleges that LendEDU misrepresented that positive consumer reviews on its website and other third-party websites reflected the actual experiences of impartial customers, when the reviews were actually written by LendEDU employees or individuals with personal or professional relationships with LendEDU.…
Continue Reading LendEDU Agrees to Settle FTC Charges Alleging Deceptive Advertising Practices

On December 20, 2019 the FTC sued FleetCor Technologies, Inc. and its CEO, Ronald Clarke, for alleged misleading advertising practices, claiming FleetCor had collected at least $200 Million dollars in hidden fees from fuel card service customers. According to the Complaint, FleetCor’s ads promised customers that their fuel card service had no setup, transaction, or membership fees. But the FTC alleges that FleetCor charged customers those very fees, merely renamed as “Account Administration Fees,” “Program Fees,” “High Credit Risk Account Fees,” “Convenience Network and Out of Network Fees,” “Minimum Program Administration Fees,” and “Late Fees and Interest and Finance Charges.” …
Continue Reading FTC Sues FleetCor for Hidden Fee and other Deceptive Advertising Practices

In November, the FTC issued a new resource for online social media influencers, titled “Disclosures 101 for Social Media Influencers,” which provides compliance tips for influencers disclosing payment, free products, and other “material connections” in their social media posts.  This new guide is the latest development in an ongoing effort by the FTC to educate influencers on when disclosure obligations apply and how to make effective disclosures.  A few takeaways from the new guide…
Continue Reading FTC Publishes “101” Disclosures Guidance for Social Media Influencers

On October 21, 2019, the Federal Trade Commission (FTC) announced that it had settled two cases regarding alleged fake indicators of social media influence and fake product reviews.

In the first action, the FTC alleged that Devumi, LLC and its CEO had “sold fake indicators of social media influence, including fake followers, subscribers, views, and likes, to users of different social media platforms, including LinkedIn, Twitter, YouTube, Pinterest, Vine, and SoundCloud.”  These fake indicators were designed to make the influencers more attractive to businesses and individuals hiring the influencers or making purchase decisions related to the influencers (e.g., the more followers or engagement associated with the influencer, the higher fees a business might pay to engage them or more value consumers might give their opinion).…
Continue Reading FTC Settles Two Cases of Alleged Fake Reviews and Online Influence

On August 7, 2019, the Federal Trade Commission convened an all-day workshop to discuss consumer protection issues associated with “loot boxes”—randomized virtual items players can purchase or earn in video games. While the production cost of video games has increased significantly, the average price of console games has largely not changed since the 1970s, and many mobile games are free to download. Panelists observed that loot boxes have helped bridge the gap between this high cost of video game production and their relatively flat sale price.…
Continue Reading Video Game Loot Boxes: FTC Workshop on the Role of Virtual Rewards in Game Play

On the heels of three FTC consent decrees involving the Consumer Review Fairness Act (CRFA), the FTC has brought two more CRFA-related complaints against home-rental businesses.

Broadly speaking, the CRFA, which became effective in 2017, makes it unlawful for a business to prohibit its customers from being able to post negative reviews online. As predicted, we are seeing an increase in FTC enforcement of the CRFA in 2019.…
Continue Reading FTC Enforcement of the CRFA is Underway

On August 7, 2019, the Federal Trade Commission (FTC) will host a public workshop to examine consumer protection issues related to the sale of “loot boxes” in video games.

For those unfamiliar with the phrase, “loot boxes” are often in-game rewards that players can buy that typically contain a random assortment of virtual “loot” items for players to use in the game (e.g., to help them succeed or to customize their in-game avatars). Although loot boxes contain virtual rewards, they are purchased with real money and are becoming an increasingly popular revenue source for game developers. However, class action lawsuits, U.S. senators,  and the FTC have questioned the techniques used to market loot boxes in video games and whether there is a risk that minors can become addicted or otherwise be exploited by these in-game offers.…
Continue Reading FTC to Hold Workshop on Consumer Protection Issues Related to Video Game Loot Boxes

In 2016, UrthBox, Inc., a subscription-based service sending monthly snack boxes to customers, had only nine reviews on the Better Business Bureau’s website and all of them were negative. By 2017 UrthBox had 695 BBB reviews, 612 of which were positive.

According to a complaint from the FTC however, the cascade of positive reviews was the result of an incentivized review program. Specifically, in 2017 UrthBox offered to send customers an incentive (a free snack box) in exchange for submitting a positive review for UrthBox on the BBB website. However, the BBB requires customers submitting reviews to affirm they have not been provided any incentive from the business they are reviewing. UrthBox also offered incentives for customers who posted about their products on Twitter, Instagram, Tumblr, and Facebook but, according to the FTC, UrthBox did not monitor or provide instructions to consumers on how to comply with the FTC’s Guidelines on endorsement disclosures. Those Guidelines put the onus on businesses to make sure that customers posting reviews sufficiently disclose any compensation received from the business.…
Continue Reading Incentivized Review and Free Trial Practices Draw the Ire of the FTC

On March 28, 2019, the Federal Trade Commission (FTC) joined the Food and Drug Administration (FDA) in sending warning letters to three companies that market products that contain cannabidiol (CBD), which the companies claim can treat a variety of serious physical and mental disorders.…
Continue Reading FTC Joins FDA in Sending Warning Letters to Companies Advertising and Selling Products Containing Cannabidiol (CBD) Claiming to Treat Alzheimer’s, Cancer, and Other Diseases