CFPB Interpretive Rules Suggest UDAAP Limits Apply to Digital Marketing Firms

According to the Consumer Financial Protection Act (“CFPA”) under the “Recent Consumer Financial Protection Bureau (“CFPB” or “Bureau”), digital marketing companies that provide targeted advertising services to financial service providers “time or space” of Interpretation rule.

Under the CFPA, companies that provide material services to financial services firms in connection with the provision of consumer financial products qualify as “service providers” subject to the UDAAP prohibition. However, Dodd-Frank includes an exception from the definition of a “service provider” for a person who merely provides time or space for advertising “through print, newspaper, or electronic media.” The Bureau’s rules of interpretation distinguish between traditional media such as print newspapers and broadcasters. . . provide airtime or physical space for advertising” and “digital marketing providers” who “in addition to providing airtime or physical space are materially involved in developing content strategies”. The Interpretive Rules provide examples of such “significant involvement”.

  • “When a digital marketer targets and delivers ads to users with specific characteristics, the digital marketer is substantially involved in developing the content strategy and is not subject to the ‘time or space’ exception. ”;
  • “[D]Digital marketing providers do not fall under the “time or space” exception. [financial services firm] Identify specific users by name and digital marketer targeting, and serve ads to those users at specific times to increase or maximize engagement. ”
  • “[When a digital marketer determines] Digital marketers do not fall under the “time or space” exception to determining which specific users see a digital ad, including by determining or suggesting which users are appropriate audiences for the ad. ”

financial operations

According to the rule, businesses engaged in these additional activities do not “single” provide “time or space for advertising” and therefore do not qualify for exceptions.1

The impetus for this rule appears to be the agency’s concerns about discrimination in digital marketing. In effect, the regulation limits the ability of digital marketing providers to “target ads to users with specific characteristics (such as demographics, geography, online behavior, offline behavior, etc.)” and “use ad targeting and delivery algorithms to It identifies the ability to [to] Identify audiences with desirable characteristics and determine if and/or when certain consumers see your ads. The rule also expressly states that “discrimination may constitute an unjust act or practice that violates the CFPB’s UDAAP prohibition,” and the 2019 Residential Cities claiming discriminatory targeted advertising. It cites the Ministry of Development’s complaint twice.

Digital marketing firms that provide targeted marketing and content strategies to their customers should consider the scope of their activities and the possible application of CFPA prohibitions to unfair, deceptive and abusive conduct and practices. .

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