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
FTC Settles with Fuel Card Provider and Executive for Allegedly Deceptive Business Practices. On September 17, the FTC announced a proposed order to settle allegations against a fuel card company and its chief executive officer for alleged violations of the FTC Act. In its 2021 administrative complaint, the FTC alleged that the company charged small business customers hidden fees, despite telling these customers that they would receive protection from unauthorized charges and have no setup, transaction, or membership fees. Previously, the FTC brought a lawsuit in federal court against the company in 2019 with the same allegations, and the court granted the FTC’s motion for summary judgment in 2023, which included injunctive relief. The district court’s order was affirmed in 2026 on all but one count. In the recent proposed order that settles the administrative complaint, the defendants agreed to pay $100 million in redress.
FTC and Washington AG Settle with Multilevel Marketing Company and Affiliates for Allegedly Deceptive Earnings Claims and Recruiting Practices. On September 17, the FTC and the Washington Attorney General (AG) filed a complaint and stipulated order to settle allegations with a multilevel marketing company and two affiliated training organizations for alleged violations of the FTC Act and Washington Consumer Protection Act. The FTC and Washington AG allege that the defendants made misleading claims to recruit participants into a direct-selling opportunity, including the likelihood of high earnings that would allow for early retirement. The defendants also allegedly encouraged participants to purchase company products that were difficult to resell and to report high sales regardless of the quantity actually sold. The defendants agreed to pay $225 million in monetary judgment in addition to injunctive relief.
Select State Enforcement Actions
New York AG Sues Online Prediction Market for Allegedly Operating Unlawful Gambling Operation. On September 24, the New York AG announced a lawsuit against an online prediction market for allegedly operating an unlawful gambling operation that is unlicensed in New York state. The lawsuit alleges that the online prediction market meets New York’s definition of legal gambling because the outcomes of events involved are uncertain and outside of the control of the consumer or hinge on a game of chance. The lawsuit seeks monetary relief.
New York AG Announces $2.3 Million Settlement with Lab Diagnostics Company Following 2019 Security Breach. On September 24, the New York AG announced a $2.3 million settlement with a lab diagnostics company following a 2019 data breach that impacted millions of customers, including 420,000 who lived in New York. As part of the settlement, the lab diagnostics company agreed to modify its data security practices and develop new systems for sharing data with third-party debt collectors.
40 AGs Settle with Auto Lender for Allegedly Engaging in Deceptive Practices. On September 17, 40 AGs announced a $700 million settlement against an auto lender specializing in subprime loans to consumers with low or no credit scores. According to the New York AG, the auto lender deceptively pressured tens of thousands of consumers to take loans with add-on products, and many lost their vehicles because they could not make monthly loan payments.
New York AG Settles with Car Dealerships for Allegedly Overcharging Consumers. On September 16, the New York AG announced a $1 million settlement with two car dealerships for allegedly imposing on consumers a 2% charge that was presented as a sales commission, even though it was not directly paid to the salesperson and was optional. According to the settlement, the dealerships also allegedly charged consumers for add-on packages that were presented as mandatory aspects of their lease or purchase agreements.
Colorado AG Settles with Companies for Allegedly Deceptive Marketing Practices. On September 16, the Colorado AG announced settlements with two companies for allegedly mailing marketing materials to Colorado businesses that appeared to be official invoices from government entities. According to the AG, the mailed materials lacked required disclaimers and included deadlines in violation of state law. As part of the settlement, the companies will pay $150,000 in refunds and fees and will cease operations in the state.
Massachusetts AG Wins Consent Judgment Against Debt Collection Companies and Owner. On September 14, the Massachusetts AG announced a consent judgment resolving allegations that debt collection and debt-buying companies and their owner engaged in unfair and deceptive debt-collection practices in violation of the Massachusetts Consumer Protection Act. The Massachusetts AG alleged that the defendants used unlawful methods to coerce payments, including seizing consumers’ vehicles even when the vehicles were unrelated to the loan at issue or otherwise exempt from seizure under state law. The consent judgment imposes injunctive relief and includes a $650,000 judgment that is suspended based on an inability to pay. The settlement allows the Massachusetts AG to lift the suspension if the AG discovers that the companies have violated the settlement or were not truthful in claiming an inability to pay.
Select NAD Advertising Challenge Case Decisions
NAD Rejects Efficacy, Safety, and Physician Recommendation Claims for Ear Cleaning Product. On September 24, NAD recommended the maker of an earwax cleansing kit modify or discontinue a variety of claims related to product efficacy, safety, and physician recommendations. NAD found that in vitro tests were not conducted under consumer-relevant conditions and therefore failed to substantiate the claim that the product “dissolves earwax in as little as three minutes.” NAD also determined that other submitted studies failed to support the claims that the product prevents future wax build-up and utilizes a “Safe & Gentle Formula.” Finally, NAD recommended the product maker clarify that the “#1 ENT Doctor Recommended” claim referred to the overall brand rather than the specific product.
NAD Recommends Disclosure of Testing Conditions for Performance Claims Regarding Pressure Washer. On September 22, NAD found that the maker of an electric pressure washer provided a reasonable basis for its maximum pressure and flow rate claims, but recommended the maker clearly disclose the limited circumstances in which customers can achieve either maximum. NAD also recommended that the maker disclose that maximum pressure was measured through three-second trigger cycles.
NAD Finds Insufficient Support for Hearing Aid Maker’s Comparative Performance Claims. On September 17, NAD recommended that the maker of a hearing aid modify or discontinue certain comparative performance claims. NAD found that the provided study did not substantiate the claim that the product delivers “better hearing all around” because large proportions of study participants expressed no preference when asked which hearing aid was better with respect to characteristics such as directionality and speech clarity. NAD also recommended that the hearing aid maker clearly disclose that the claim of “up to 8 dB SNR improvement for better spatial awareness” compares the product with the maker’s own earlier technology.
NAD Recommends Maker of Mushroom-Containing Chocolates Limit Health Claim to One Particular Ingredient. On September 16, NAD found insufficient support for a mushroom-containing chocolate maker’s claim that “cool, calm and collected is one delicious bite away.” NAD determined that the claim was substantiated only for saffron – not for the other ingredients, L-theanine and kanna – and recommended limiting the claim to saffron rather than to the product as a whole.
Federal and State Regulatory Announcements
FTC Publishes Automobile Industry Price Transparency FAQs. On September 15, the FTC announced frequently asked questions (FAQs) on price transparency to help the automobile industry to comply with the FTC Act. Among other things, the FAQs provide guidance on what an advertised price should include; how to handle document fees, rebates and discounts; how to account for price negotiations; and how to communicate price transparently across different media. Specifically, the FAQs state that the advertised price of a vehicle must be the actual price that any consumer can pay to purchase the vehicle, excluding charges that the government requires the consumer to pay.
FTC Seeks Public Comment on Updating Impersonation Rule. On September 24, the FTC announced an Advance Notice of Proposed Rulemaking (ANPRM) to update its Rule on Impersonation of Government and Businesses (Impersonation Rule). The Impersonation Rule prohibits the impersonation of government, businesses, and their officials or agents in interstate commerce. The ANPRM seeks comment “on the extent to which ad-optimization tools and services offered by social media, search engines and other digital marketplace platforms further efforts by scammers to impersonate legitimate businesses and government agencies using online ads.” The ANPRM also asks whether the use of these platform ad-optimization tools and services in connection with impersonation scams may constitute unfair or deceptive acts or practices, and whether the FTC should amend the existing Impersonation Rule to address these acts and practices. The ANPRM seeks comment on numerous potential measures, “including vetting advertisers, monitoring posted ads, investigating suspected impersonation scam ads, removing confirmed impersonation scam ads and pursuing disciplinary action against the offending advertisers.” Comments will be due 60 days after the notice is published in the Federal Register.
California Governor Signs Expanding Privacy Rights Act. On September 27, the California Governor signed the Expanding Privacy Rights Act (SB 923), which extends consumer deletion requests under the California Consumer Privacy Act to data obtained from third parties. The law also requires online-only businesses to offer an online submission method for privacy requests. The Act takes effect January 1, 2027.
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