New CFPB Interpretation Rules Target Digital Marketing Providers

On August 10, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued a new Interpretive Rule that clarifies when digital marketing providers must comply with the Federal Consumer Financial Protection Act. Under the new rules, large tech companies that use behavioral advertising techniques to sell financial products are subject to the Consumer Financial Protection Act of 2010 (“CFPA”).

Businesses are subject to the CFPA and engage in unfair, deceptive, or abusive conduct or practices when offering or providing financial products or services for consumer personal, family, or household use. is prohibited. The CFPA also covers his providers of services to these companies that provide “substantial services” in connection with the provision or provision of consumer financial products or services. Service providers that merely provide “time or space for the advertisement of consumer financial products or services through print, newspaper, or electronic media” are exempt.

CFPB’s new interpretation rule clarifies that if a digital marketing provider is materially involved in the development of its content strategy, it will be considered a CFPA-covered service provider because it provides material services . Under the rule, digital marketing providers must “substantially develop a content strategy” when identifying or selecting prospective customers or when selecting or placing content that influences consumer engagement, including purchasing and adoption behavior. are “involved”.

As an example, the CFPB recognizes that a digital marketing provider qualifies as a service provider if it targets ads to users with certain characteristics, regardless of whether the company using the digital marketing provider specifies the characteristics. It is stipulated to have Similarly, digital marketing providers may use the Services when companies identify certain users by name and digital marketing providers target advertisements to those users at specific times to improve or maximize engagement. considered a provider. A digital marketing provider is also characterized as a service provider when it determines or suggests which users are appropriate targets for advertising. In announcing the rule, CFPB director Rohit Chopra warned that big tech companies that use behavioral targeting technology to sell financial products would fall within the scope of the CFPA, warning law enforcement that these companies emphasized the need to hold Under the CFPA, both the CFPB and states can take enforcement actions against regulated businesses that engage in unfair, deceptive, or abusive practices.

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