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Welcome to Wiley’s update on recent developments and what’s next in consumer protection enforcement and regulation. We cover developments with the Federal Trade Commission (FTC or Commission), the Consumer Financial Protection Bureau (CFPB or the Bureau), and state Attorneys General (AGs), as well as self-regulatory advertising challenges decided by BBB National Programs’ National Advertising Division (NAD). Please reach out to any of our authors with any questions about recent regulatory or enforcement activity on the federal or state level.
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Select Federal Enforcement Actions
DOJ Settles with Social Media Company for Allegedly Violating COPPA. On August 21, the Department of Justice (DOJ) announced a settlement with a social media company to resolve alleged violations of the FTC Act, the Children’s Online Privacy Protection Act (COPPA), and the company’s 2019 FTC consent order. The matter was referred to DOJ by the FTC, and the original complaint, filed in 2024, alleged that the company failed to provide the necessary notice and receive the requisite consent from parents before collecting the personal information of children under 13 on their platform. According to the DOJ, the company agreed to pay $300 million and an additional $100 million upon vacatur of a prior consent decree against the company’s predecessor.
FTC and Connecticut AG Settle with Auto Dealership for Allegedly Charging Unnecessary Fees. On August 19, the FTC and the Connecticut Attorney General (AG) filed a stipulated order in district court to settle alleged violations of the FTC Act and Connecticut Unfair Trade Practices Act against an auto dealership, along with its owner and a number of key employees. The 2024 complaint alleged that the defendants misled consumers by failing to disclose certain fees associated with certified pre-owned cars and included certain add-on products without consumer consent. The defendants agreed to pay $4 million for consumer redress in addition to injunctive relief.
FTC Settles with Bill Payment Company and Its Co-Founders for Allegedly Deceptive Marketing Practices. On August 17, the FTC filed a stipulated order in federal court settling allegations against a bill payment company and its two co-founders for alleged violations of the FTC Act, Restore Online Shoppers’ Confidence Act (ROSCA), and the Gramm-Leach-Bliley Act (GLBA). The 2024 complaint alleged that the company misled consumers by not fully disclosing the fees related to their bill payment services and misrepresenting their relationship with the billing companies. The defendants agreed to pay $2.1 million in addition to injunctive relief.
FTC Sues Credit Repair Operation for Allegedly Deceptive Practices. On August 3, the FTC filed a complaint in federal court against a credit repair company, its affiliates, and its officers for alleged violations of the FTC Act, the Credit Repair Organizations Act, the Telemarketing Sales Rule, ROSCA, GLBA, and the Electronic Fund Transfer Act. The complaint alleges that the defendants, among other things, falsely promised to improve consumers’ credit scores, impersonated creditors and debt collectors, collected upfront fees, and failed to provide adequate disclosures for recurring charges. On August 4, the court granted the FTC’s motion for a temporary restraining order and an asset freeze. The FTC seeks monetary and injunctive relief.
Select State Enforcement Actions
Colorado AG Settles with Car Wash Company for Alleged Unfair Automatic Renewal Practices. On August 20, the Colorado AG announced a settlement with a car wash company for alleged use of unfair automatic renewal practices for its monthly membership fees in violation of Colorado’s auto-renewal law. Specifically, the Colorado AG alleged that the company failed to provide proper disclosures, notices, terms, and cancellation options for monthly membership programs offered at the time of payment. According to the AG, between August 2022 and February 2025, over 30,000 Coloradans experienced a rate increase without notice and 40,000 customers did not receive a receipt for their purchase. As part of the settlement, the car wash company will pay $1,353,465 in restitution along with other injunctive relief.
California DFPI Issues Order Against Lender for Failing to Obtain a License and Charging Unlawful Interest Rates. On August 13, the California Department of Financial Protection and Innovation (DFPI) issued a Desist and Refrain Order, Claim for Ancillary Relief, and Notice of Intent to Issue Order Assessing Penalties against a lender for: (1) allegedly making 31 loans to Californians without a California Financing Law license; and (2) charging annual interest rates exceeding the maximum rate permitted by the California Constitution. The California DFPI’s Notice of Intent to Issue Order Assessing Penalties provides that the agency intends to issue an order assessing administrative penalties in the amount of $157,500.
CPPA Settles with Two Data Brokers for Alleged Violations of the CCPA and the Delete Act. Between August 11 and August 13, the California Privacy Protection Agency Board (CPPA) announced settlements with two data brokers (here and here). According to the CPPA, the August 11 settlement requires an Iowa data broker to pay $116,490 and change its practices after the data broker violated the Delete Act by failing to timely register as a data broker. According to the settlement, the data broker also violated the California Consumer Privacy Act (CCPA) by allegedly requiring Californians to provide the last four digits of their Social Security numbers before they could opt out of the sale of personal information. The August 13 settlement requires a Boston-based data broker to pay a $52,400 fine for failing to timely register as a data broker.
Select NAD Advertising Challenge Case Decisions
NAD Recommends Modification of Claims for Hair-Regrowth Product. On August 24, NAD recommended that a maker of a hair-loss and hair-regrowth treatment product modify or discontinue claims about doctor trust and research studies. Specifically, NAD found that a survey of 250 independent dermatologists supported some carefully tailored claims but not the unqualified claims that the product contains ingredients which supposedly are “doctor-trusted” or “dermatologist-recommended.” Among other things, NAD also recommended the product maker qualify one of its claims, “shown in research to be safe and effective,” to more clearly identify the subject of the research, the limitations of the evidence, and the distinction between topical and oral treatments.
NAD Finds “Proven” and “Industry-Leading” Claims Unsupported for Fall Detection Product Designed for Elderly. On August 19, NAD found insufficient support for two separate claims made by the maker of an AI-enabled fall detection and monitoring system for assisted living and memory care communities. The unsupported claims were that the product was “[p]roven to reduce falls, risk, and costs while elevating care” and provided “industry-leading capabilities and reliability.”
NAD Rejects “2-Minute” Hair Drying Claim for Hair Styling Tools. On August 13, NAD recommended the maker of hair styling tools modify or discontinue its claim that the product could dry hair “in just 2 minutes.” Although a textual disclaimer qualified the claim to shoulder-length hair, NAD found the placement of the 2-minute claim next to photos of models with long hair to be misleading.
NAD Recommends Modification of “World’s Highest Quality” Claim When Alongside Product Attributes. On August 11, NAD recommended that the maker of athletic and hockey tape products modify or discontinue its claim of “World’s Highest Quality,” especially when the claim appeared in parallel to measurable product attributes. In contrast, NAD found the claim to be permissible puffery when appearing alone, not next to any specific product attribute.
Federal and State Regulatory Announcements
FTC Seeks Comment on Proposed Enforcement Policy Statement Regarding Personalized Pricing. On August 19, the FTC released a proposed enforcement policy statement regarding “personalized pricing,” including the use of a consumers’ personal data to set prices. The proposed policy statement states that while Congress has not given the FTC authority to prohibit personalized pricing in all circumstances, the FTC “intends to enforce the law aggressively against any deceptive or unfair personalized pricing practices that violate Section 5 of the FTC Act or any other law enforced by the Commission.” The proposed statement specifies that personalized pricing without adequate disclosures or personal pricing based on data collected without verified consumer consent likely violates Section 5. The proposed statement also offers a non-exhaustive list of personalized pricing practices that may violate Section 5. The FTC is seeking comment on the proposed enforcement policy statement with comments due 30 days after publication in the Federal Register.
Washington AG Issues Data Privacy Report. On August 14, the Washington AG issued the state’s first Data Privacy Report. The Report outlines the AG’s concerns with the “modern data economy,” including potential harms related to data practices, and makes recommendations to address them. The Report identifies the AG’s four key concerns: (1) overcollection and secondary use of personal data; (2) insufficient consent requirements and deceptive consent collection designs; (3) collection and the sale of sensitive data; and (4) lack of transparency in the data broker industry.
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