How do telemarketing laws impact your business?

📌 Overview of Applicable Laws
The Federal Telephone Consumer Protection Act (TCPA) places several prohibitions and restrictions on calls or texts to consumers, such as whether businesses use equipment that qualifies as an automatic telephone dialing system (ATDS or auto-dialer).

The definition of ATDS has been at the forefront of TCPA litigation, particularly considering changing technology.

In Facebook v. Duguid (2021), the United States Supreme Court issued its ruling to decide a split on the definition of an ATDS, and, by doing that, the Court narrowed the dialing systems that qualify as an ATDS or auto-dialer under the TCPA by deciding that a device must have the capacity either to store a telephone number using a random or sequential number generator or to produce a telephone number using a random or sequential number generator.

On the other hand, many states (Florida, Oklahoma, and Washington included) have enacted mini-TCPAs in their states that include a broader definition of ATDS than the TCPA post-Duguid.

📌 Takeaway
Now businesses need to be aware of both the federal and state requirements when creating a compliant calling and texting campaign. Does your business engage in telemarketing?

💡 Need Help?
Contact Your Ad Attorney, Inc. today to discuss how we can help you comply with the TCPA and state telemarketing laws.

Intuit in Hot Water with the FTC for misleading “free” claim

📋 The Federal Trade Commission (FTC) recently alleged that Intuit/TurboTax engaged in misleading ads for claiming that they offer “free” tax-filing services with inadequate disclaimers. The company failed to explain how people can make “free” tax filings or even clarify that the “free” claim only applies to consumers who file “simple tax returns.”

The FTC said that Intuit’s disclaimers were:

🔸Inadequate because the “free” tax-filing service is limited to “simple tax returns” or “simple U.S. returns only;”
🔸Disproportionately small when compared to the prominent text emphasizing the “free” service;
🔸Appearing for just a few seconds, in writing only, not read by voiceover, and often in color similar to the background;
🔸With eligibility requirements hidden behind a hyperlink over the words “See why it’s free,” requiring consumers to click on the hyperlink to trigger a pop-up explaining the limitations; and
🔸Unfair because their website forced consumers to spend significant time and effort creating an account and inputting their sensitive personal and financial information before learning they were ineligible for the “free” service.

Intuit has already agreed to settle claims with the attorneys general for all 50 states and the District of Columbia for $141 million, requiring Intuit/TurboTax to cease its “free” advertising campaign.

📌 The TurboTax case is a reminder that all advertising must be truthful and not misleading to consumers, and, more importantly, disclosures must be presented clearly and conspicuously. Disclosures cannot cure a false claim or provide information contradicting a material claim. Businesses should also avoid designing customer flows with #darkpatterns that hide or delay disclosure of material information (like fees!) or adopting bait-and-switch messaging to lead consumers to a more expensive outcome.

☎️Contact Your Ad Attorney today. We help businesses comply with advertising laws.

Is your business in compliance with state and federal telemarketing laws?

☎️ In Muccio v. Global Motivation, Inc., the U.S. District Court for the Southern District of Florida dismissed a class action complaint involving a plaintiff who received five unsolicited marketing text messages in violation of the Florida Telephone Solicitation Act (FTSA) and the Telephone Consumer Protection Act (TCPA) because the plaintiff failed to allege that the violations resulted in a concrete injury.

Rather than focusing on the quantitative number of messages the plaintiff received, the court’s decision focused on the qualitative nature of the injury and followed the Eleventh Circuit’s Salcedo v. Hanna decision, which requires a holistic review of factors, including whether:
🔹plaintiff experienced a “financial loss or other pecuniary harm,”
🔹the content of the text messages was “highly offensive,” and
🔹plaintiff’s injury is more than a “bare statutory violation” or “generalized allegations of inconvenience, invasion of privacy, aggravation, annoyance.”

The lawsuit, subject to an appeal, demonstrates that plaintiffs continue to challenge telemarketing practices. The Eleventh Circuit’s (which includes federal courts in Florida, Georgia, and Alabama) embrace of a narrower interpretation of injury when assessing violations of the TCPA and similar state laws is not necessarily the framework elsewhere. We recommend thoroughly reviewing your business’s marketing practices, including analyzing which state laws apply.

💡Does your business engage in telemarketing? Contact Your Ad Attorney, Inc. today to discuss how we can help you comply with the TCPA and state telemarketing laws.

Intuit will pay $141 million as settlement after tricking people to pay for TurboTax

Intuit, the developer of TurboTax, will pay millions of Americans as part of a $141 million settlement with the 50 states and the District of Columbia.

The investigation, led by Letitia James of New York, revealed how Intuit tricked people into paying for TurboTax software even though they were eligible to receive it for free. The company admitted no wrongdoing and agreed to pay $141 million to put this matter behind it.

The deal covers those who paid TurboTax for the tax years 2016 to 2018. For each year a person paid for eligible tax filing services, the company will send them approximately $30.

The logistics of distributing the money will be handled by a third party. These payments will be sent by check or electronic services such as PayPal and Venmo. More than 465,000 consumers in Texas are expected to receive restitution payments from Intuit, along with more than 371,000 purchasers in California and more than 176,000 in New York.

Intuit will have to stop marketing TurboTax under “free” ad campaign and make several improvements with its disclosure of products. The company said that it already complies to most of the advertising practices and expects minimal effect from implementing the changes moving forward.

Contact me if you need help making sure your business’s marketing is under compliance with the law!

Are you following laws like the “30-day Rule” when selling physical products online?

⤵️ WHAT is the “30-day Rule”?

Federal laws require that when you advertise and sell physical items, you must:

→ Have a reasonable basis for stating or implying that you can ship within a certain time.

OR

→ If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days.

⤵️ WHEN does the 30-day rule apply?

It doesn’t matter how you market the items, how the customer pays, or who reached out first. The 30-day Rule still applies. This is even if the customer orders by mail, phone, or internet.

⤵️ WHAT HAPPENS if you can’t ship in time?

If you accept a customer’s order and then realize you can’t ship the product to them within the time you said or within 30 days, the law requires that you get your customer’s permission for the delay.

If you’re unable to get the customer’s permission (whether phone, email, or otherwise) the law requires that you immediately refund all the money your customer paid for the unshipped items.

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Want to Build a Strong Brand Name? Think in Terms of Trademarks to Add Value to Your Brand!

Are you unsure how to select a brand name that is both memorable and a strong asset? From a trademark perspective, a good name can help you not only stand out but also protect your brand. Here are 3 types of marks to consider.

3 Types of Trademarks

1️⃣ A “Coined” Mark–a word that has no meaning in the English language
E.g., EXXON for gasoline

2️⃣ An “Arbitrary” Mark–a word that exists but is entirely unrelated to the business, product, or service that uses it
E.g., APPLE for computers

3️⃣ A “Suggestive” Mark–a word that suggests the nature of the product or service without describing it
E.g., NETFLIX for streaming services

 

✅ DO select the strongest types of trademarks: COINED and ARBITRARY marks

These provide an Opportunity to build a positive association between the name and the company, product, or service

❌ DON’T Select a brand name that DESCRIBES the product or service

These are more likely to be used by competitors leading to a higher risk of brand competition

Descriptive words must remain available to describe products and services

These are more likely to be rejected as trademarks

 

Have a trademark law question? Message me!

 

Are you following laws like the “30-day Rule” when selling physical products online?

⤵WHAT is the “30-day Rule”?

Federal laws require that when you advertise and sell physical items, you must:

→  Have a reasonable basis for stating or implying that you can ship within a certain time.

OR

→ If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days.

⤵WHEN does the 30-day rule apply?

It doesn’t matter how you market the items, how the customer pays, or who reached out first. The 30-day Rule still applies. This is even if the customer orders by mail, phone, or internet.

⤵WHAT HAPPENS if you can’t ship in time?

If you accept a customer’s order and then realize you can’t ship the product to them within the time you said or within 30 days, the law requires that you get your customer’s permission for the delay.

If you’re unable to get the customer’s permission (whether phone, email, or otherwise) the law requires that you immediately refund all the money your customer paid for the unshipped items.

Amazon to pay $61M for pocketing tips promised to drivers

Amazon told delivery drivers in its Amazon Flex program – and customers who placed orders through Prime Now and AmazonFresh – that 100% of tips would go directly to the drivers. But, for more than two years, Amazon secretly pocketed over $61 million of those tips. Now the Federal Trade Commission will hold Amazon to its promises and Amazon will be returning the entire $61.7 million to Amazon Flex drivers.

What can you learn from this case? 

When advertising, be transparent about material terms. Explain up front important information about pay, tips etc. If you change the nature of the deal, be clear about that, too. Concealing what’s going on can lead to class actions, fines, and investigations. 

Substantiate your claims – express or implied. 

Amazon misled customers and drivers by stating that “100% of tips are passed on to your courier.” How would customers have responded if Amazon had told them the truth: “We take 30% to cover our costs and pass on 70% to your courier”? Like other objective claims about products or price, companies also honor their representations to the public. 

Do you engage in marketing or have an online checkout flow for your products or services? → You may want to hire a marketing lawyer to keep you out of hot water. 


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