Advertising Law Blog

On October 7, 2007 the FTC announced six settlements with companies and individuals accused of violating the requirements of the National Do Not Call Registry.

The Response Magazine article "New FDA Dietary Supplement Rule Presents Challenges" is now available here.

On October 23, in testimony before the U.S. House of Representatives’ Subcommittee on Commerce, Trade, and Consumer Protection of the Energy and Commerce Committee, Bureau of Consumer Protection Director Lydia Parnes stated that, even though the initial entries by consumers in the Do Not Call registry would soon hit their 5-year expiration date, it would not purge any numbers until final Congressional or agency action to determine whether that 5-year period should be extended.

On August 15, 2007, New York Governor Elliot Spitzer signed into law an amendment to the New York General Business Law in relation to selling and manufacturing of fur-bearing articles of clothing.

On October 17, 2007, Andrew Lustigman will be co-presenting a workshop entitled "Workding With Experts To Prove Clinical Studies Claims."

Sheldon Lustigman will present a legal forum at the Avrick Direct DMA breakfast on October 15, 2007 at 8 am in Chicago The presentation will focus on the legal responsibilities of list owners, list managers and list brokers and new developments in direct marketing law. Contact Avrick Direct for more information.

Integretel's recent filing of a Chapter 11 bankruptcy action in the Northern District of California has stunned many experienced telecom players. Integretel acts as a billing aggregator for telecommunications service providers to provide LEC billing support functions.

Today’s follow up NY Times Story “2 Firms Tied to Phone Lists Will Review Their Policies” on direct marketing suppliers involved in supporting fraudulent marketers highlights the current regulatory quagmire suppliers find themselves in.

Andy Lustigman To Speak On Dietary Supplement Compliance Issues

A bill greatly restricting sweepstakes promotions is shuffling through the New Jersey legislature. New Jersey Assembly Bill 2950 ("Regulates Operations of Sweepstakes In New Jersey) presents enormous problems for sweepstakes marketers. This legislation is not limited to just direct mail, but rather all channels.

On June 6, 2007, Andrew Lustigman presented the May 2007 Consumer Protection Update.

The FTC recently announced a settlement with defendants Crystal Ewing and David Ewing along with affiliated companies relating to the marketing of sweepstakes reporters to residents of the United States, Canada, and the UK.

"When Spam Isn't Spam: An Unfiltered Look at Self-Regulation and the Law Behind E-mail," which was to be held on Monday, April 30 at Touro Law Center in Central Islip, NY, has unfortunately been postponed.

Last summer, e360 Insight, an e-mail direct marketer, brought a lawsuit against UK-based block list Spamhaus alleging defamation, tortious interference with contract and prospective economic advantage, and other claims.

Follow up regulatory action to that undertaken by the New York Attorney General previously reported in this blog, the Washington Post reports that the FTC is sending letters to approximately 200 major corporations whose ads the FTC believes to have run through deceptively installed spyware.

A Georgia class action filed by an individual who played "Get Rich With Trump"-- a companion game to the popular "The Apprentice" television show -- by entering via a premium SMS, illustrates potential risks utilizing entry methods that have a fee associated with the use.

In the wake of growing legislation restriction payday lending, the Community Financial Services Association of America (CFSA) recently announced voluntary changes to its industry best practices.

On February 7, 2007 the Federal Trade Commission issued its annual report, “Consumer Fraud and Identity Theft Complaint Data on fraud complaints consumers have filed with the agency during 2006.

As previously discussed in this blog, the FTC held a workshop on negative option marketing. Now, the panelists' presentation materials from the FTC's workshop analyzing marketing of goods and services utilizing negative options are online.

As previously discussed in this blog, advertisers' growing reliance on rebates to offer sale prices is leading state lawmakers to consider legislation governing how rebates can be advertised and handled resulting in a mish mash of legislation that is confusing to both businesses and consumers.

On January 29, 2007 the New York Attorney General announced separate settlements with three major online advertisers for promoting products and services on the Internet through deceptively installed programs known as "adware." The agreements, with Priceline, Travelocity, and Cingular Wireless mark the first time an Attorney General has held advertisers responsible for ads displayed through adware.

FTC Requests Public Comments on Endorsement Guides

A recent lawsuit (Gorran v. Atkins Nutritionals, Inc.) decided in federal court in New York City rejected the claim of a fed-up dieter who blamed the diet he followed for causing him heart problems in part, on First Amendment grounds.

As reported in the Times of London, the founders of Neteller -- Stephen Lawrence and John Lefebvre a publicly-traded UK online payments company, were arrested in connection with a multibillion-dollar money laundering indictment linked to Internet gambling.

After much debate, including concerns raised by the Federal Trade Commission that the prior proposal would restrict truthful advertising and ultimately harm consumers, the New York State Unified Court System has announced the new attorney advertising regulations that will go into effect February 1, 2007.

The Federal Trade Commission announced that it will continue past January 2, 2007 its policy of forbearing enforcement of the prerecorded voice messaging policy under certain limited conditions. 

The FTC has announced a January 25, 2007 workshop on marketing programs with negative option features.

Sixteen state attorneys general, led by California, jointly announced $14.5 million dollar settlement agreements on December 12, 2006 with Chase Bank and Trilegiant Corp. concerning their direct mail practices.

Second Life was clearly generating the most buzz at the 28th Annual Promotion Marketing Law Conference in Chicago on December 12th. Second Life http:/www.secondlife.com is a massive multiplayer online role-playing game (MMORPG), where players create avatars that interact with each other in a large virtual world.

Andrew Lustigman will be leading a roundtable discussion on Direct Marketing Law at the Promotion Marketing Association Annual Law Conference on December 11, 2006 in Chicago.

As the holiday shopping season kicks into full gear, many businesses seek to offer consumers rebates on the product's purchase price.

I am amazed by a front-business page New York Times story - Why Short Sellers Want to Crash The Tupperware Party -- reporting that investors are short selling positions in companies such as Avon Products, Herbalife, and Pre-Paid Legal because of pending Federal Trade Commission rulemaking on business opportunity programs. Wall Street is not only seeking to read tea leaves, but some investors are going so far as to try to influence the promulgation of the regulation in order to advance the value of their short positions.

Jane Pauley, the television news anchor has sued The New York Times and DeWitt Publishing, alleging she was misled to believe she was being interviewed for an article on mental health when she actually was being featured in a special advertising supplement.

Promotions are constantly embracing the latest technology and trends in an effort to capture the public's attention. Currently, Web 2.0 is shaping the Internet and is a driving force behind many promotions. Creating a "Web 2.0 Promotion" presents many new legal challenges that must be considered and carefully evaluated.

In a major boost to food nutrition and responsible marketing, Disney announced that it was moving to only permit its licensed properties (such as Mickey Mouse, Buzz Lightyear, and Ariel the Little Mermaid) to be utilized on food products that meet prescribed nutritional standards.

After previously obtaining a consent order with retail-drug store chain CVS regarding the availability of a free alternative method of entry in sweepstakes promotions, on October 16, 2006, the New York Attorney General announced that CVS had breached the order. In the breach challenge, CVS Corporation agreed to pay $152,000 in civil penalties.

There are a number of commonly held myths about copyright and its limitations. If you or your clients believe any of the following myths, you may be including unauthorized work within your Web site or other creative projects without intending to.

The Connecticut Attorney General announced that GEICO insurance company has said it will no longer run a false and misleading television advertisement in Connecticut that claims the company repairs cars in a few days or less.

New legislation, by Representative Jim Leach (Republican Iowa), was added to an unrelated bill on port security and passed by Congress.

Following a trial this past summer, an Illinois federal court recently ruled for the Federal Trade Commission in its case against the marketers of the Q-Ray ionized bracelet.

On November 1, 2006, the DMA will discontinue all mail and most web-based consumer registrations for Telephone Preference Service (TPS). Consumers will be redirected to the Federal Trade Commission's Do Not Call Registry instead. This was first reported in AdvertisingLawBlog on July 7, 2006.

On Friday, September 15, 2006, NBC's Dateline aired a one-hour expose on creating an infomercial for a bogus product. 

On September 14, 2006 the New York Attorney General reached a series of settlements with companies that failed to obtain licenses for "going-out-of-business" sales.

Internet gambling and on-line fantasy leagues have recently come under attack by a variety of sources, including federal and state authorities as well as a private individual. These actions are yet another warning that games that require an entry fee and provide a monetary reward to the winner remain a high risk proposition.

On Monday, October 16, 2006, Sheldon Lustigman will be sharing his insight on the risks and exposure those in the list industry share in the current regulatory environment.

The Washington Post reports that the Center for a New American Dream is promoting October 1-7th as "Junk Mail Awareness Week". The principle behind the week is purported environmental concerns regarding direct mail, particularly catalogs.

The Michigan Attorney General announced a settlement regarding the "Save Our Heritage Sweepstakes" that had been operated by the Citizens for Wildlife Conservation.

On December 7, 2006, Andrew Lustigman will be co-presenting a workshop entitled "Using Consumer Surveys and Clinical Studies for Substantiation Purposes."

On August 17, 2006, the FDA announced that the United States District Court for the District of New Jersey has adopted an $8 million consumer redress program for purchasers of certain products from Lane Labs-USA, Inc.

Vonage recently settled with the New Jersey Attorney General by agreeing to pay $45,945 in penalties. The Consumer Affairs Division received 167 consumer complaints against Vonage concerning the company's business practices.

On Friday, August 11, 2006, the Long Island Business News named Jonathan Ezor as "One to Watch".

The State of Wisconsin announced that it was suing telephone-billing aggregator ILD Telecommunications, Inc. based on alleged cramming activities by its customer, ILD's customer Radical Persson, Inc., who marketed Internet services billed under the names Echurch Network and ILab Technologies. The state's lawsuit seeks refunds for all affected Wisconsin consumers, as well as penalties for the company's violations of Wisconsin law.

The National Association of Attorneys General (NAAG) announced its list of the Top 10 consumer complaints for 2005.

Direct marketers who intend to rely on fax advertisements must have an established business relationship with the recipient prior to sending the fax, as well as having received the recipient's fax number pursuant to that relationship.

Ckrush Digital Media Inc. launched "LiveMansion the Movie", the first feature film by an online community - starring and directed by its members.

E-mail marketing remains a hot topic for both legislators and law enforcement officials. One recent development involved an update to an existing anti-spam law in Florida.

On July 17, 2006, U.S. prosecutors announced that they had arrested David Carruthers, the CEO of BetOnSports, PLC at Dallas-Fort Worth International Airport. BetOnSports is a publicly traded widely advertised online gambling portal that owns a number of offshore Internet Sports books and casinos. BetOnSports counts U.S. bettors as the overwhelming majority of its customers. The federal government has taken the position that "commercial gambling across state and international borders is a crime."

On July 17, 2006, U.S. prosecutors announced that they had arrested David Carruthers, the CEO of BetOnSports, at Dallas-Fort Worth International Airport.

Click fraud continues to present a growing problem for search engines and their advertisers, because Google, Yahoo and other web portals get paid each time someone clicks on advertising links displayed on a search engine result regardless as to whether a sale or legitimate lead is generated.

The DMA announced that yesterday that it was ending enrollments in its telephone preference service (TPS) The TPS was a laudable industry alternative - initiated way back in 1985 - to deal on an self-regulatory basis with persons who did not want to receive telemarketing calls.

Regulators and law enforcement officials are increasingly using a new tactic against allegedly false or deceptive marketing practices. Instead of challenging the marketers themselves, they are focusing enforcement efforts against the service providers and suppliers of the marketers.

As part of our ongoing discussion about the best practices and risks involving privacy and use of customer and employee information, here are 10 resolutions for businesses and organizations that want to be responsible about privacy:

Community is one of the most powerful ways to build brand loyalty, and an online discussion can be a great way to establish and nurture such a community.

A lawsuit involving fantasy baseball is pending in the Eastern District of Missouri that could effect the way millions of baseball fans are able to enjoy the sport.

The cases of employee and customer data breaches (discussed in our earlier blog entry) continue to increase, and even those we knew about are getting worse.

Virgin Mobile recently announced a new program called SugarMama, which lets cell phone users earn one minute talking time by receiving text messages on their phones, then answering questions to prove they were alert to the content or by watching 30-second commercials on a computer. The company plans to make the SugarMama program available to Virgin Mobile users in a few weeks.

The Direct Marketing Association (DMA) issued its report today on its Ethics Committee actions for the first quarter of 2006. The Ethics Committee is a self-regulatory body that reviews direct marketing advertising and marketing programs for compliance with governing laws and DMA guidelines.

At the Privacy and Identity Theft: Protecting Your Company seminar on Long Island last week, the speakers (from the International Association of Privacy Professionals, the NAD and CA) spoke of many different issues, but one theme kept recurring: the damage to customer trust when information is lost by or stolen from a company.

Foreign fraudsters - watch out. The regulatory world continues to get more organized on combating global frauds. This week authorities in five countries arrested 565 people in fraud schemes that netted more than $1 billion.

The recording industry, in its never-ending quest to halt technological advances that enable the transfer or copy of music, filed suit last week against XM Satellite Radio over a new device that allows listeners to store digital copies of their favorite songs in their XM radio players.

The New York Times ran an interesting article this past Sunday (free registration required) about the ongoing battle between unsolicited commercial bulk e-mailers (aka spammers) and the software and service companies that provide tools to keep unwanted messages out of user e-mailboxes.