Navigating the “Age of Uncertainty” with Consumer Protection Enforcement

Elizabeth Kerns All Things WOMM 0 Comments

Consumer protection is an ever-changing landscape permeating virtually every company and industry. Rules, regulations and the means to enforce them are constantly shifting while technology continues to improve. The speakers at this event represented both local and national government associations, as well as large national companies. Speakers from the Office of Attorney general, CFPB and the FTC contributed insight on protecting consumers from fraud, competition as well as education and enforcement of regulations, while the client-side lawyers engaged in a panel discussed being a responsible and compliant marketer within the current environment.

 

The speakers were:

 

Anthony DiResta, Partner, Holland & Knight

Karl Racine, Attorney General, District of Columbia

Tom Pahl, Acting Director, FTC Bureau of Consumer Protection  

Greg Nodler, Senior Counsel for Enforcement Policy and Strategy, Consumer Financial Protection Bureau (CFPB)

Phillip Ziperman, Director, Office of Consumer Protection for the Office of the Attorney General, District of Columbia

Panelists: Jim Dudukovich, Marketing, Advertising and Social Media Counsel, Blue Apron; Aba Rodgers, Global Marketing Counsel and Worldwide Licensing Attorney, The Coca-Cola Company; Amber Lee Williams, Senior Associate General Counsel, U.S. Compliance, Wal-Mart Stores Inc.

Takeaways:

 

  1. Regulators, authorities and consumers all want fairness within and across industries.
  2. One mistake will not kill you if you prove a culture of compliance and act in good faith.
  3. Companies determine the environment, not who is in office.

 

Regulators, companies and consumers all want fairness within and across industries

 

All parties have an advantage in protecting consumers. Companies want to compete in a fair marketplace and regulators want to protect consumers who do not want to be subjected to scams and fraud. For example, Handy.com had an unfair advantage in the on-demand home service industry. They made false claims about the integrity of their employees through their vetting system. Consumers complained of items being stolen from their homes, contrary to the claim that employees had passed extensive background checks. After investigation, it was discovered Handy.com was, in fact, not following through on their background check claims. Handy.com then had to change their messaging to accurately reflect their practices, as well as reimburse stolen items.

 

One mistake will not kill you if you prove a culture of compliance and act in good faith

 

In an effort to ensure companies have the ability to comply, agencies are doing their best to educate companies. For example, the FTC mails materials on law compliance and avoiding scams — particularly to small businesses, who may otherwise not have education or access to them.

When thinking about marketing campaigns, it’s imperative to take a step back and look at the campaign from an outside point of view to truly understand if information is being conveyed in a truthful manner. One situation where this is crucial is in influencer campaigns. Influencers do not always disclose their sponsorships within the legal definition of “clear and conspicuous.” However, the FTC is taking action by mailing educational and warning letters to influencers and their agents to better inform the influencer marketing community about repercussions of their actions.

Culture of compliance is important through all levels of an organization. Companies must have a framework for self-regulation in the world of digital media so compliance is infused throughout each level of the organization. For example, not every Tweet can be approved by a company’s lawyers. Instead, a framework serves to create a culture of compliance.

 

Companies determine the environment, and the consumers are the regulators – it’s not who is in office

 

Laws may change depending on the priorities of the administration. The companies, however, determine the environment. Panelists referred to this as the court of public opinion — with the platforms to voice one’s opinion available in today’s digital world, consumers have no problem giving product reviews and more. A company’s reputation, then, rests heavily upon public opinion.; the easiest way to lose a good reputation is to not comply with regulation. Even a small misstep in compliance can derail the biggest companies.

Thanks to The National Bar Association Commercial Law Section, Holland & Knight and WOMMA for this fantastic and informative event.

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