ER Magazine - July/August 2017 - 15

Many states appear to have stepped up
the resources they devote to consumer
protection enforcement.
retailer, and a website developer.
California entered into an $8.5
million settlement with Wells Fargo
over privacy violations that included
recording consumers' phone calls without notifying consumers that they were
being recorded in a timely manner. In
the arena of online privacy, the California attorney general announced a
new web-based complaint portal where
consumers can easily report violations of
California's "Shine the Light" law, which
requires websites that collect certain personal information from consumers who
visit the site to post a privacy policy.
California's movement in the area
didn't surprise us; Kansas' activity
in this area did. The state filed a suit
alleging that a document management
company disposed of business records
containing consumers' personal information in dumpsters, in violation of
Kansas' data safeguard law. But multistate settlements such as the Adobe data
breach serve as a reminder that states
are happy to work together in the area
of data privacy and security, even when
the FTC is not involved.
Food, Drugs, and Everything
In-Between
Claims for dietary supplements, food,
and drugs continue to be a large area
of enforcement activity. California's
Food, Drug, and Medical Device Task
Force, comprised of numerous local
district attorneys, continues to target
companies large and small, filing multiple suits and entering into significant
settlements. Following California's lead,
New Jersey established the Dietary
Supplements Task Force to examine and make recommendations for
legislative or executive action regarding
the sale and use of dietary supplements
in the state. New York, unsurprisingly,

continues to target dietary supplements, as does Missouri, which is
perhaps more surprising.
Continuity Programs
Colorado, Florida, Washington, Iowa,
Texas, and California are targeting negative-option and continuity
programs aggressively, and the settlements aren't small. Colorado's attorney
general announced an $11.1 million
judgment against Subscriber Services,
Inc., alleging that the company sent
postcards and text messages to consumers urging them to call an 800 number
regarding an "unclaimed reward," and
then entering those who called into
multiyear subscriptions and refusing to
cancel their contracts.
Washington entered into a settlement
with Julep Beauty, Inc., that required
the company to pay $3 million for
using deceptive negative-option marketing tactics that lured consumers into
signing up for recurring shipments of
Julep products, and then making it very
difficult to cancel their subscriptions.
Other states have reached settlements
involving out-of-state companies that
violated their buying club laws, as
well as settlements against publishing
groups, tech support companies, and
electronic services plans.
A recurring theme in autorenewal
settlements is that companies enrolled
consumers in an automatic payment
program without consumer consent or
without disclosing the terms of these
plans clearly and conspicuously. The
failure to make clear, complete, and
timely disclosures to consumers is a
recipe for regulatory scrutiny.
Financial Services
States have been aggressively pursuing companies that provide

consumer financial services. Arkansas,
Connecticut, the District of
Columbia, Illinois, Iowa, Maryland,
Massachusetts, Michigan, Minnesota,
Nevada, New Mexico, New York,
North Carolina, Vermont, and
Virginia have been active in the area of
consumer finance, particularly in shortterm lending and debt collection. At
the same time, Kansas, Massachusetts,
Michigan, Minnesota, North Dakota,
and West Virginia have been aggressively targeting companies engaging in
debt collection and debt servicing.
Another indication of willingness by
state attorneys general to work together
is the recent multimillion-dollar
settlement that attorneys general from
48 states and the District of Columbia
reached with MoneyGram Payment
Systems, Inc. That settlement resolved
a multistate investigation focused on
consumer complaints alleging that
MoneyGram sent money to third
parties involved in schemes to defraud
consumers.
States are also implementing task
forces to analyze areas of consumer
financial services and target companies
engaged in unfair or unlawful practices.
For example, Texas started a task force
related to debt collection practices. And
Alabama instituted the Consumer Protection Task Force, which will review
Alabama's consumer lending laws and
different types of consumer lending.
It may be tempting to view changes
at the FTC or the presidential administration's aggressive efforts to roll
back federal regulations as a signal
that consumer protection enforcement will soon become more lax.
However, state attorneys general and
California district attorneys (who have
the same enforcement powers) have
demonstrated that aggressive consumer
protection enforcement remains the
order of the day, regardless of what
happens in Washington, D.C. Marketers and their service providers should
consult and work with experienced
legal counsel to ensure compliance and
mitigate legal risk.
electronicretailermag.com | electronicRetailer

15


http://www.electronicretailermag.com

Table of Contents for the Digital Edition of ER Magazine - July/August 2017

Happenings
Bottom Line
Out & About
Dispatches
Retail Movers
Dish With Rick Petry
Fair Trade
Making The Brand
Agency Insights
Law & Orders
25 Years of Tristar
Direct to Digital
Smart Buy
Classifieds
Advertisers’ Index
DR 101
Parting Shot
ER Magazine - July/August 2017 - Cover1
ER Magazine - July/August 2017 - Cover2
ER Magazine - July/August 2017 - Happenings
ER Magazine - July/August 2017 - Bottom Line
ER Magazine - July/August 2017 - Out & About
ER Magazine - July/August 2017 - Dispatches
ER Magazine - July/August 2017 - 5
ER Magazine - July/August 2017 - Retail Movers
ER Magazine - July/August 2017 - 7
ER Magazine - July/August 2017 - Dish With Rick Petry
ER Magazine - July/August 2017 - 9
ER Magazine - July/August 2017 - Fair Trade
ER Magazine - July/August 2017 - Making The Brand
ER Magazine - July/August 2017 - Agency Insights
ER Magazine - July/August 2017 - 13
ER Magazine - July/August 2017 - Law & Orders
ER Magazine - July/August 2017 - 15
ER Magazine - July/August 2017 - 25 Years of Tristar
ER Magazine - July/August 2017 - 17
ER Magazine - July/August 2017 - 18
ER Magazine - July/August 2017 - 19
ER Magazine - July/August 2017 - Direct to Digital
ER Magazine - July/August 2017 - 21
ER Magazine - July/August 2017 - 22
ER Magazine - July/August 2017 - 23
ER Magazine - July/August 2017 - Smart Buy
ER Magazine - July/August 2017 - Advertisers’ Index
ER Magazine - July/August 2017 - DR 101
ER Magazine - July/August 2017 - 27
ER Magazine - July/August 2017 - Parting Shot
ER Magazine - July/August 2017 - Cover3
ER Magazine - July/August 2017 - Cover4
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