Digital Marketing Firms Subject to Consumer Financial Protection Act, Says CFPB | Fox Rothschild LLP

Digital marketing companies that help financial firms design and place online advertising campaigns are service providers for the purposes of the Consumer Financial Protection Act 2010, the Consumer Financial Protection Bureau said in a new ruling. interpretative.

As such, they are subject to CFPB enforcement for unfair, deceptive or abusive conduct.

“When Big Tech companies use sophisticated behavioral targeting techniques to market financial products, they must comply with federal financial consumer protection laws,” CFPB Director Rohit Chopra said in a statement. “Where you combine the targeting and serving of ads to consumers, for example using algorithmic models or other analytics, with the provision of advertising ‘time and space’, you are no longer exempt from the provisions of the financial consumer finance laws.”

Traditional marketing businesses were exempted from the restrictions on unfair, deceptive, and abusive acts and practices and other federal consumer finance laws enforced by the CFPB under the “time or space” exception (the purchase advertising space on popular radio or television programs and print publications, without engaging in more technically advanced activities).

Digital marketing companies are different, said the CFPB.

According to a rule of interpretation of the CFPB:

Digital marketing companies will be held liable for misrepresentations if they have participated in the development of marketing campaigns and strategies that contain them.

This is due to the fact:

  • Digital marketers are much more involved than their traditional counterparts in targeting ads to specific demographics and where the ads are placed.
  • When digital marketing vendors are materially involved in content strategy development, they typically provide a material service.
  • Where digital marketers are materially involved in the development of the content strategy in addition to providing airtime or physical space, they do not fall within the exception to “solely” provide “time or from space”.
  • Digital marketing providers do not fall under the “time or space” exception if they target and serve advertisements to users with certain characteristics, even if those characteristics are specified by the person covered.
  • Likewise, digital marketers do not fall under the “time or space” exception if a covered person identifies particular users by name and the digital marketer targets and serves the advertisements to those users at specific times. to increase or maximize engagement.

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