Stay ADvised: 2026, Issue 1

DWT and the Financial Technology Association Host Luncheon with FTC's Director of Bureau of Consumer Protection, Chris Mufarrige

In December, DWT's Washington, D.C., office hosted a luncheon in connection with the Financial Technology Association featuring guest speaker Chris Mufarrige, the current FTC Director of the Bureau of Consumer Protection. DWT partner Bradford Hardin interviewed Director Mufarrige, in which he discussed a recalibrated enforcement posture that emphasizes price transparency, economically grounded remedies, and targeted injunctive relief, while maintaining a generally pro-innovation stance toward new technologies and business models. Highlights included the following:

• On rulemaking, expect prioritization of systemic market failures—particularly those involving hidden or mandatory fees—rather than product bans or restrictions on consumer choice. Recent and anticipated rules in areas such as ticketing and rental housing focus on ensuring that consumers see the full price upfront, reflecting the agency's broader concern with unfair or deceptive fee practices.
• In enforcement actions, expect to see more tailored remedies, with monetary relief closely tied to economic harm analysis and injunctive provisions calibrated to the nature of the conduct and the sophistication of the business involved. Further, there is an effort to reassess long-standing practices such as 20-year compliance orders and monitorships, particularly in fast-evolving technology and privacy contexts.
• With respect to fintech, AI, and data-driven products, Director Mufarrige emphasized that the FTC is not skeptical of innovation itself, but expects companies to comply with existing consumer protection frameworks. Key risk areas include accurate disclosure of material terms, truthful claims about AI capabilities, robust data security practices, and compliance with privacy and consumer reporting obligations where applicable. New technologies will be evaluated under traditional p 5 standards, with a particular focus on fraud and deception.
• Finally, Director Mufarrige signaled continued FTC coordination with state attorneys general—especially where consumer monetary relief is at issue—and increased attention to practices affecting small and mid-sized businesses, including fee disclosures and unilateral changes to terms of service.

Stakeholder companies should focus on upfront transparency, defensible substantiation for technology-related claims, and careful decision-making at regulatory "close calls," particularly where short-term business incentives may conflict with consumer expectations.

FTC Delivers $60 Million Settlement Over Instacart's Deceptive Practices

In a significant win for the Federal Trade Commission (FTC) in its quest to root out deceptive fees and unconsented automatic subscription renewals, the FTC entered into a $60 million settlement with Instacart, one of the biggest names in the grocery delivery market. The settlement takes the company to task for alleged false advertising tactics, deceptive fees, and misleading automatic subscription renewals.

The centerpiece of the allegations is the "free delivery" promise that Instacart makes to consumers on their first order. The FTC alleges, based on consumer complaints, that despite the "free delivery" claim, Instacart charges consumers a mandatory "service fee" ranging from 7.5% to 15%, which is actually a delivery fee "by another name." The FTC further alleges that Instacart's "100% satisfaction guarantee" claim, implying that the company will provide full refunds to consumers who are not fully satisfied, is deceptive. This claim is often made while consumers are placing orders on the site, allegedly to make "consumers feel more comfortable placing orders on the platform." According to the complaint, many consumers who experienced issues like late deliveries or subpar service were offered a small credit, but nothing close to a full refund. The FTC notes that Instacart conceals the refund option from the menu consumers use to report issues, employing a tactic that leads consumers to believe they can only obtain a credit towards a future order, rather than a refund.

Using its ROSCA authority, the FTC's complaint also takes issue with Instacart's membership program. Instacart advertises a 14-day free trial period. What it does not do, according to the FTC, is clearly and conspicuously disclose that after the 14-day trial expires, the subscription renews automatically at a rate of about $99 a year and that those who do not cancel before the trial period ends will be charged that amount. Instacart also allegedly tells consumers that they can "cancel anytime," but that is misleading. Instacart+ and its membership fees can only be cancelled under limited circumstances, says the FTC.

The stipulated order prohibits Instacart from misrepresenting delivery costs, fees, satisfaction guarantees, and subscription terms. It requires clear and conspicuous disclosure of any mandatory fees when advertising "free" or discounted delivery and disclosure of material limitations on refund or satisfaction-guarantee claims. The order also imposes explicit negative-option limitations, including requiring clear disclosure of material subscription terms, express informed consent before charging consumers, and prohibitions on misrepresentations about cancellation or billing practices. The injunctive relief focuses on transparency and informed consumer choice, rather than mandating specific prices, refund policies, or user-interface designs.

Key Takeaways

The Instacart settlement underscores the FTC's continued focus on pricing transparency, particularly where "free" or discounted offers are accompanied by mandatory fees. The order reinforces that satisfaction guarantees and refund claims must clearly disclose any material limitations, and that subscription or auto-renew programs must comply with ROSCA-style requirements, including clear disclosure of material terms and express affirmative consent before charging consumers. Notably, the injunctive relief does not mandate specific pricing, cancellation mechanics, or interface designs, but instead emphasizes accurate marketing, clear disclosures, and informed consumer choice—highlighting the risk that advertising claims about costs, guarantees, or subscriptions can create enforcement exposure even absent novel practices or technical violations.

FTC Puts Review Practices on Notice with New Warning Letters

Just before Christmas, the Federal Trade Commission took an important early step in enforcing its new rule on the Use of Consumer Reviews and Testimonials, issuing warning letters to ten unidentified companies over potentially non-compliant review and testimonial practices. While the letters do not detail the conduct of concern, the message from the FTC is clear: review compliance is now an enforcement priority.

The Rule, which went into effect in October 2024, is aimed at preserving the authenticity of online reviews. It prohibits a range of practices the FTC views as deceptive or unfair—such as using fake or insider reviews without disclosure, paying for or incentivizing only positive reviews, suppressing negative reviews, or inflating social media influence metrics.

The warning letters do not include any findings of wrongdoing. But they do put recipients—and the broader market—on notice that the FTC is actively monitoring review and testimonial practices and is prepared to escalate. Should the FTC pursue enforcement, the FTC would assert that these letters constitute "actual notice" of violative conduct. Violations can carry civil penalties of more than $50,000 per violation, making this an area of real financial exposure.

What this means for companies: now is a good time to take a hard look at how reviews are collected, moderated, displayed, and incentivized. Common pressure points include loyalty programs, post-purchase emails, customer service "review gating," influencer testimonials, and contract terms that may discourage honest feedback.

At a minimum, conversation starters with the business may include:

• Are we offering any incentives tied—explicitly or implicitly—to positive reviews?
• Are all material connections behind testimonials clearly disclosed?
• Do our moderation or takedown practices risk suppressing legitimate negative reviews?
• Are our teams aligned on what the Rule actually allows?

The FTC's use of warning letters suggests it is giving companies an opportunity to course-correct—but that window may be short. Businesses that rely heavily on reviews as part of their marketing strategy should treat this as a prompt to shore up compliance now, before enforcement moves from warnings to penalties.

Third Circuit Affirms Lower Court's Finding of False "Made in USA" Claims

This is a tale of bitter rivals sparring over the advertising of a very specific but essential builder's tool, the industrial caulking gun, and whether it was falsely advertised as "Made in the USA." In the most recent chapter in this false advertising litigation, the Third Circuit upheld the lower court's finding that Albion Engineering Co. falsely advertised its caulking guns as "designed and manufactured in the USA" and also that "All Albion Products are Made in America." Competitor Newborn also sells caulking guns. Newborn's suit against Albion alleged that Albion's products were at least partially manufactured abroad, and that this harmed Newborn financially, in violation of the Lanham Act and New Jersey law. The panel also upheld the lower court's grant of a permanent injunction requiring Albion to rectify its marketing practices and take affirmative steps to remove offending materials from the marketplace, as well as a monetary award for disgorgement.

On appeal, Albion argued that the district court erred in assessing liability under the Lanham Act because Newborn failed to introduce evidence of deception, materiality, and actual harm. To make its argument that Newborn did not prove actual deception, Albion took issue with Newborn's failure to include a consumer survey. The panel noted that a consumer survey was not necessary to prove consumer deception if, as here, other evidence existed proving this factor. The panel next turned to Albion's argument that Newborn had not shown that the deception was material, pointing to testimony indicating that the company's "Made in America" claims gave it an edge in the marketplace. Albion made the case that Newborn had not shown that it suffered harm as a result of its conduct, but the panel again rejected that argument, reasoning that Newborn had demonstrated injury by showing perted sales: salespeople sold more Newborn caulking guns once potential customers realized that Albion contained foreign components.

Finally, Albion challenged the lower court's grant of a permanent injunction against it as overbroad, since its current practices do not violate the Lanham Act (even if prior practices and advertising were violative). The injunction requires Albion to send letters to distributors asking that any caulking guns with references to U.S. country of origin or Made in USA claims be returned. The district court rejected Albion's argument since Albion's old marketing materials and products were still in circulation, and the appeals court agreed. Finally, Albion challenged the injunction's requirement that it continue providing detailed country of origin information until it receives detailed U.S. Customs and Border Protection (CBP) Guidance. The appeals court agreed with the lower court that this was appropriate because there was evidence that Albion had avoided obtaining a clarifying ruling from the CBP by omitting any country-of-origin marking.

Key Takeaways

False "Made in USA" designations present a heightened risk of claims from not only regulators, but competitors who can pursue Lanham Act claims without necessarily needing consumer survey evidence. That is, consumer surveys are not strictly required where other record evidence (customer testimony, internal documents, market behavior) establishes deception—but they nevertheless remain an important tool in close cases.

Further, internal decision-making, sourcing awareness, and compliance efforts (or lack thereof) can play a decisive role in liability, remedies, and injunctive relief. Even if current marketing is compliant, courts may impose ongoing obligations to police legacy materials, downstream distributors, and third-party content. While decided under the Lanham Act, the ruling reflects judicial disapproval of exaggerated "Made in USA" claims and reinforces the importance of substantiation consistent with FTC guidance—particularly where foreign components are involved.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.