Privacy Law Blog : Privacy Lawyers & Attorneys : Proskauer Rose Law Firm : CAN-SPAM, FCRA, FACTA

On April 27, 2010, the Federal Trade Commission announced separate settlements with women’s clothing retailer Talbots and its telemarketer SmartReply, Inc. for violations of the Telemarketing Sales Rule (“TSR”). In two separate complaints filed in the U.S. District Courts for the District of Massachusetts (Talbots) and the Central District of California (SmartReply), the FTC alleged that the companies violated the TSR’s prerecorded message requirements in connection with seven advertising campaigns between February and July 2009. Specifically, the FTC alleged that SmartReply’s robocalls on behalf of Talbots (and J. Jill) did not allow consumers to opt out of future calls until they had listened to almost all of the prerecorded solicitation or failed to provide instructions to consumers about how to be added to the do-not-call list; did not immediately disconnect consumers that chose to opt out and instead connected them to another prerecorded advertisement before allowing them to opt out by pressing an additional prompt; and failed to notify live call recipients of their right to opt out at any time during the call.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

            The Florida Supreme Court recently held that a commercial general liability (“CGL”) insurance policy that provides coverage for an “advertising injury” covers a violation of the Telephone Consumer Protection Act (“TCPA”). Penzer v. Transp.  Ins. Co., No. SC08-2068, 2010 WL 308043 (Fla. Jan. 28, 2010). The definition of “advertising injury” in the CGL policy at issue provided coverage for an “injury arising out of” the “[o]ral or written publication of material that violates a person’s right of privacy.” Id. at *4. The policy at issue had no relevant exclusions. Id. at *5-6.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The U.S. District Court for the Northern District of Illinois recently ruled that a plaintiff may maintain a suit for receiving an unsolicited Short Message Service (“SMS”) text message under the Telephone Consumer Protection Act (TCPA) of 1991, even though the plaintiff was not actually charged for receiving the message. In Abbas v. Selling Source, LLC, No. 09-CV-3413 (N.D. Ill. Dec. 14, 2009), Judge Joan B. Gottschall noted that in enacting the TCPA, “Congress was just as concerned with consumers’ privacy rights and the nuisances of telemarketing” as it was with cost-shifting of communications addressed by the TCPA. Judge Gottschall continued to state that “[a]utomated calls invade privacy and pose nuisances regardless of whether the called party is charged for the call, and so congressional intent is furthered by the TCPA’s application to both charged and uncharged calls.”

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The first lawsuit challenging Maine's Act to Prevent Predatory Marketing Practices Against Minors has concluded.  The District of Maine issued a Stipulated Order of Dismissal on September 9, stating that there is a likelihood that the statute is "overbroad and violates the First Amendment", and putting third parties "on notice" that a private suit "could suffer from the same constitutional infirmities."  In the meantime, the lawsuit was dismissed without prejudice, in light of the State Defendant's representation that Maine will not enforce the statute and that the Legislature will reconsider it when they reconvene in January 2010. 
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In mid-September, Maine’s “Act to Prevent Predatory Marketing Practices against Minors” is scheduled to take effect.  Due to the lack of a scienter element in several of the requirements of this new law, this Act could have far-reaching consequences for all businesses that engage in direct marketing or that sell or transfer personal information to third parties, even if the business does not have knowledge that the information regards a minor.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On September 10, 2008, Timberland Company, an outdoor clothing and shoe merchant, along with co-defendant ad agencies GSI Commerce Inc. (“GSI”) and AirIt2Me Inc. (“AirIt2Me”), settled charges brought under the Telephone Consumer Protection Act (“TCPA”) arising from unsolicited text messages advertising Timberland’s holiday sale.  Pursuant to the settlement, Timberland must employ best practices in future marketing, and must pay $7 million into a fund for distribution to the class.  Prior to any future mobile marketing campaign, GSI agreed to circulate to its marketing personnel a copy of the Mobile Marketing Association’s Consumer Best Practices guidelines, and to establish meaningful training and compliance checks in connection with those guidelines. Additionally, the defendants must pay class counsel a maximum amount of $1,750,000.  The settlement has been agreed to by all parties, but is still subject to final approval by the court.
 

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Although the use by businesses of prerecorded message telemarketing has been prohibited for years for most calls, many companies have continued to lawfully deliver prerecorded telemarketing calls to their existing customers or others with whom they are deemed to have an existing business relationship (“EBR”). The Federal Trade Commission’s (“FTC”) recent amendments to its Telemarketing Sales Rule (“TSR”) will greatly restrict that practice. Effective September 1, 2009, companies subject to FTC jurisdiction will not be able to make interstate prerecorded telemarketing calls to EBR consumers absent the prior express written agreement of the consumer.

Effective December 1, 2008, any company that continues to make such calls must comply with new restrictions that will continue even after September 1, 2009 when prior express written consent of the consumer is mandatory. The restrictions require that the prerecorded message: (1) state at the outset that the call recipient can be asked to be placed on the caller’s company specific do not call list; (2) make available an automated opt-out mechanism for “live” recipients of a call that enables the recipient to place the number on the company’s do not call list; and (3) if the call is answered by an answering machine or voicemail, leave a toll free number where the recipient can call and be connected to an automated system where they can opt-out of further calls. In addition, such calls must ring for at least 15 seconds or 4 rings before they are disconnected and any message must begin within two seconds of the call recipients’ greeting. The new TSR amendments do not govern purely informational calls (e.g., a doctor’s appointment reminder), intrastate calls, or calls made by entities not regulated by the FTC. Most of those calls will continue to be subject to Federal Communications Commission (“FCC”) rules that permit prerecorded telemarketing calls to EBR consumers subject to the recipient requesting to be placed on a company’s own internal do not call list.

 

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On September 4, 2008, in American Bankers Association v. Lockyer, No. 05-17163, 2008 WL 4070308 (9th Cir. Sept. 4, 2008), the Ninth Circuit Court of Appeals revived part of the California Financial Information Privacy Act (“S.B. 1”), allowing consumers to opt-out of certain information-sharing activities between financial institutions and their affiliates. Previously, in the 2005 case American Bankers Ass'n. v. Gould, 412 F.3d 1081 (9th Cir. 2005), the Ninth Circuit ruled that the state statute was preempted by provisions of the Fair Credit Reporting Act (“FCRA”) regarding affiliate sharing of “consumer report” information.  The recent 2-1 decision preserves consumers’ rights under California law to restrict affiliate data-sharing related to non-consumer report information.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Section 214 of Fair and Accurate Credit Transactions Act (“FACTA") was enacted to amend the Fair Credit Reporting Act (the “Act”) to give consumers the right to restrict certain entities from using certain information received from their affiliates to make solicitations to that consumer unless the consumer has been provided (1) “clear and conspicuous” notice that the consumer’s information will be shared for such purposes, and (2) an opportunity to opt out of having such information shared for such purposes.   

On November 7, 2007, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the National Credit Union Administration issued a joint final rule (along with the Federal Trade Commission (FTC) and the Securities and Exchange Commission(SEC), which separately adopted and proposed, respectively, similar regulations) under the amended Act (the “Affiliate Marketing Rule” or “Final Rule,” codified at 12 C.F.R. Parts 41, 222, 334, 571 and 717) governing the use of specific consumer information obtained by covered entities from their affiliates for certain marketing purposes. 

The Affiliate Marketing Rule became effective on January 1, 2008, and compliance by covered entities is required by October 1, 2008.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Many B2C companies are beginning to explore marketing to consumers’ wireless devices using text messaging (“SMS,” or “short message service”) and MMS messaging (“Multi-media Messaging Service”). They may even target their promotions based on where the recipient is physically located using the wireless device’s GPS technology. They also may target their promotions to teens and tweens. What legal issues should companies be aware of as they navigate through this relatively new area? Continue Reading...

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link