Tag Archives: Lesley Fair

New Impersonator Rule Gives FTC a Powerful Tool for Protecting Consumers and Businesses

by Lesley Fair

photo of the author

Lesley Fair (photo courtesy of the author)

To turn the old adage on its head, imitation is the insincerest form of falsity. After years of fighting back against scammers who impersonate government agencies and companies, the FTC proposed a Trade Regulation Rule on Impersonation of Government and Businesses. The Rule would allow the FTC to recover consumer redress from impersonators or to seek civil penalties against those who violate the Rule. After a painstaking process of considering public comments about the proposal, the FTC just published a Final Rule  – and we think it’s an important step in the fight against this form of fraud. Continue reading →

Facts About Fraud from the FTC – and What it Means for Your Business

by Lesley Fair 

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Lesley Fair (photo courtesy of author)

The FTC just issued its 2023 Consumer Sentinel Network Data Book jam-packed with facts about the kind of scams consumers have reported to us. Has the reported dollar amount lost to fraud gone up or down this year? And what are the most frequently reported scams? At this point you may ask, “I run a lawful business. Why should it matter to me?” Two reasons. First, scammers have you, your company, and your community in their sights and the Data Book can help you defend against emerging fraud trends. Second, scammers often try to mask their illegal intent by hiding behind legitimate businesses. For companies that work hard to maintain their good reputation, it’s not enough not to be a scammer. You also don’t want to be “scam-adjacent.”

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How “Location, Location, Location” Can Lead to “Enforcement, Enforcement, Enforcement”

By Lesley Fair

Photo of the author

Lesley Fair (photo courtesy of the author)

Do consumers attend a Christian church? Are they the parents of preschoolers? Would the description “wealthy and not healthy” apply to them? By tracking people’s mobile devices, Texas-based InMarket Media has collected their precise geolocation and cross-referenced their location histories with other personal data to categorize them into roughly 2,000 different audience segments that the company then marketed for the purpose of targeted advertising. According to a proposed FTC complaint, InMarket Media did that without fully informing consumers and without getting their consent to use their location – including information linking them to particularly sensitive places – for commercial purposes.

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What Goes on in the Shadows: FTC Action Against Data Broker Sheds Light on Unfair and Deceptive Sale of Consumer Location Data

by Lesley Fair

Photo of the author

Lesley Fair (photo courtesy of the author)

SCENE:   A crowded city or a dark street. (Cue ominous music)

ACTION:  The camera focuses on the protagonist as they make their way to a location – maybe it’s a place of worship, a doctor’s office, or a reproductive health clinic. They think they’re alone, but what they don’t know is that they’re being tailed. What’s more, highly personal information regarding their whereabouts will be shared with third parties, all without their knowledge or consent.

A private eye novel? A detective thriller on a streaming service? No. According to a proposed settlement announced by the FTC, it was all in a day’s work for data broker X-Mode Social, which has billed itself as the “2nd largest US location data company.” The FTC says X-Mode and its corporate successor Outlogic, LLC sold consumers’ raw location data without their informed consent and without placing effective limits on how X-Mode’s customers used the sensitive information it bought from X-Mode.

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Coming Face to Face with Rite Aid’s Allegedly Unfair Use of Facial Recognition Technology

by Lesley Fair

(Photo courtesy of the author)

Rite Aid has “used facial recognition technology in its retail stores without taking reasonable steps to address the risks that its deployment of such technology was likely to result in harm to consumers as a result of false-positive facial recognition match alerts.” That’s the lawyerly language of the FTC’s just-filed action against drug store chain Rite Aid and a subsidiary. Put in more common parlance, the FTC alleges that Rite Aid launched an inadequately tested and operationally deficient covert surveillance program against its customers without considering the impact that its inaccurate facial recognition technology would have on people wrongly identified as “matching” someone on the company’s watchlist database. Among other things, a proposed settlement in the case would ban Rite Aid from using any facial recognition system for security or surveillance purposes for five years.

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FTC Announces New Safeguards Rule Provision: Is Your Company Up on What’s Required?

by Lesley Fair

Lesley Fair (photo courtesy of the author)

October 2023 marks the 20th anniversary of the effective date of the Gramm-Leach-Bliley Safeguards Rule. Its purpose then – and its purpose now – is to protect consumers by requiring entities covered by the Rule to “develop, implement, and maintain reasonable administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of customer information.” The FTC just announced an amendment to the Rule that will require non-banking financial institutions within the FTC’s jurisdiction to report data breaches affecting 500 or more people.

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Crypto Platform Celsius Feels the Heat from FTC Lawsuit Alleging Unfair and Deceptive Practices

by Leslie Fair

Photo of the author

Lesley Fair (photo courtesy of author)

When it comes to law enforcement action against unlawful conduct in the cryptocurrency marketplace, the temperature is rising, according to a proposed FTC settlement with crypto platform Celsius Network and a pending complaint against its former corporate officers. The make-no-mistake message for others in the industry: Don’t believe that “wild west” talk. Your sector may be novel, but established FTC consumer protection standards apply to you with full force.

New Jersey-based Celsius Network marketed a broad range of cryptocurrency products and services to consumers – interest-bearing accounts, personal loans secured by cryptocurrency deposits, a cryptocurrency exchange, and the like. Celsius’ promotional claims grabbed the attention of consumers, even those who might have had initial qualms about crypto. Not to worry, consumers were assured. Because Celsius earned profits by making secured crypto loans to other exchanges, the company claimed to be “safer than a bank” and posed “less risk” or even “no risk” to consumers.

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FTC Alleges Amazon Enrolled People in Prime Without Consent and Thwarted Members’ Attempts to Cancel

by Lesley Fair

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Lesley Fair (photo courtesy of author)

In the latest action to challenge alleged digital dark patterns, the FTC has sued Amazon for enrolling people in its Prime program without the consumer’s consent. Once consumers were signed up, the complaint also charges that Amazon set up online obstacles that made it difficult for them to cancel their Prime subscription. According to press reports, Amazon’s in-house nickname for its efforts to deter consumers from unsubscribing from Prime may shed light on the company’s practices. Read on for more about the lawsuit, which alleges violations of the FTC Act and ROSCA – the Restore Online Shoppers’ Confidence Act.

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Not Home Alone: FTC Says Ring’s Lax Practices Led to Disturbing Violations of Users’ Privacy and Security

by Lesley Fair

Photo of the author

Lesley Fair (photo courtesy of author)

Many consumers who use video doorbell and security cameras want to detect intruders invading the privacy of their homes. Consumers who installed Ring may be surprised to learn that according to a proposed FTC settlement, one “intruder” that was invading their privacy was Ring itself. The FTC says Ring gave its employees and hundreds of Ukraine-based third-party contractors up-close-and-personal video access into customers’ bedrooms, their kids’ bedrooms, and other highly personal spaces – including the ability to download, view, and share those videos at will. And that’s not all Ring was up to. In addition to a $5.8 million financial settlement, the proposed order in the case contains provisions at the intersection of artificial intelligence, biometric data, and personal privacy. It’s an instructive bookend to another major biometric privacy case the FTC announced today, Amazon Alexa. 

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