During periods of economic downturn – which most experts agree is what the U.S. will be facing for the next year or two – good marketing strategies become critical to maintaining business. While there are a number of strategies a lender can adopt, it is important to make sure lenders’ marketing efforts remain compliant with all laws and regulations.
The Marketing Compliance for Lenders special report reviews important areas of compliance. Excerpts from the report follow.
Social media influencers and marketing compliance
In 2009, the Federal Trade Commission (FTC), published updated guidelines governing endorsement testimonials. The guidelines, which pre-date most social media companies (and some influencers), have been the basis by which influencer marketing has been regulated. The 2009 guidelines defined an endorsement as “any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.”
The current language of the guides focuses primarily on television and print media advertising with sparse references to the internet and no mentions of social media or influencer marketing.
The FTC announced in February 2020 = it would be updating the guidelines ….
FTC, CFPB monitoring how companies handle online reviews
“Consumers who rely on such reviews deserve to get a true and accurate picture of what other consumers think,” the FTC stated. “Operators of websites or platforms that feature reviews should have processes in place to ensure that this happens and should be transparent about their practices. Doing so is important for establishing consumer trust and avoiding potentially deceptive conduct that would violate Section 5 of the FTC Act.”
The FTC has also released new guidance specifically for online retailers and review platforms to educate them on the agency’s key principles for collecting and publishing customer reviews in ways that do not mislead consumers….
FTC takes harder look at online advertising
The FTC has undertaken or announced several other initiatives to address issues of digital marketing. The commission has particularly targeted the use of “surveillance advertising” as something it plans to heavily regulate.
Last year, Accountable Tech submitted a petition for rulemaking to the FTC. The petition requested the FTC enact a rule which would prohibit the act of surveillance marketing.
“Over the past decade, surveillance advertising has become a highly lucrative business model dependent upon pervasive tracking and profiling for the purpose of selling hyper-personalized ads,” the petition stated. “Surveillance-based advertising is an inherently unfair method of competition which both relies upon, and cyclically reinforces, monopoly power.”
The CFPB and ‘modern-day redlining’
Under Chopra’s leadership, the CFPB has continued its aggressive stance toward “modern-day redlining.” Richard Horn, former CFPB senior counsel and special advisor and now co-managing partner of Garris Horn LLP, recently spoke on the subject during an October Research webinar.
“So, what is modern-day redlining? I call it marketing discrimination because that’s really what it is,” Horn said. “Marketing discrimination or your ‘modern-day redlining’ doesn’t involve how a lender treats any particular applicant. It’s all about where the institution is marketing.
“It’s really an extension of ECOA to impose an affirmative requirement to target marketing to every single demographic in your market area. That’s the way that agencies view this,” Horn said.
To read each of these articles in their entirety, download the Marketing Compliance for Lenders special report. It is available free to all Dodd Frank Update subscribers.