On August 10, 2022, Jonathan Pompan was quoted in Bloomberg Law on a recent interpretive rule from the Consumer Financial Protection Bureau (CFPB) stating that digital marketing companies aren't entitled to an exemption from federal consumer finance laws that traditional marketing firms can claim.
According to the article, traditional marketing firms have long been exempted from restrictions on unfair, deceptive and abusive acts and practices and other federal consumer finance laws enforced by the CFPB under what is known as the "time or space" exception. That's because they typically only purchase ad space on popular radio or television shows and in print publications, without engaging in more technically advanced activities. Digital marketers are much more heavily involved than their traditional counterparts in targeting advertisements at specific demographic groups and where the ads are placed, the bureau said.
The CFPB's announcement comes as regulators try to grapple with cryptocurrency companies' advertising practices and other misleading statements about whether customer funds are covered by the Federal Deposit Insurance Corp.'s (FDIC) insurance fund. Digital marketing firms will be held accountable for false statements if they were involved in crafting marketing campaigns and strategy that contain them, according to the rule.
The interpretive rule indicates a potential shift in strategy from the CFPB and its counterparts at the Federal Trade Commission (FTC), which also oversees digital marketers. "Often the agencies have focused on some sort of facial advertising of consumer financial services or substantial assistance, and not necessarily what may be taking place behind the scenes with respect to the placement and tailoring of advertising by companies that provide time and space," said Pompan.
Click here to access the article.