On August 25, 2022, Ellen Berge was quoted in American Banker on the Consumer Financial Protection Bureau’s (CFPB) scrutiny of digital marketing companies in light of the agency’s recent interpretive rule specifying that firms using analytics to target individuals can be held liable for violating consumer protection laws.
According to the article, the new rule is concerning to financial institutions because of their increased reliance on digital marketing to reach consumers. The ruling, which says that digital marketers can no longer claim an exemption from the Consumer Financial Protection Act, and are liable for "unfair, deceptive or abusive acts or practices," or UDAAP, raises two questions: what led to this heightened scrutiny and what can financial institutions — and the digital marketing firms they turn to — expect?
Berge noted the CFPB announcement in March that discrimination in all consumer finance segments, including noncredit products, violates UDAAP prohibitions. "This more recent rule about digital marketers and their role in carrying out pricing or advertising initiatives could be a component of that theme," Berge said. She has seen an analogous concern come up with the Federal Trade Commission, which on August 11 announced it was seeking comment around the harm that comes from commercial surveillance and is exploring whether new rules are intended to protect people's privacy and information.
"Consumers only know a small portion of what is being collected about them, according to the FTC," Berge said. "When you couple that with some of the newer advanced behavioral targeting to deliver advertisements, this all seems to fit together."