On October 18, the CFPB sued a software company for utilizing their online payment platform to enroll unknowing consumers into annual subscriptions through deceptive acts and “dark pattern” techniques in violation of the CFPA and EFTA. Among other things, the complaint alleges that the company encouraged consumers to unknowingly enroll in free trials and converted the free trials into annual subscriptions through a “negative option” renewal policy (our sister blog covered “negative option” marketing in a previous post here). During this process, the company allegedly collected consumers’ registration information and consumer payments data (e.g., credit or debit card number) so that it could transmit the consumer payments data through its payments systems. Continue Reading CFPB Sues Payment Platform Over Dark Patterns
The CFPB recently published a circular clarifying liability under consumer financial protection law for financial companies that fail to safeguard consumer data. The circular describes how firms may be violating the CFPA’s prohibition on unfair acts or practices with respect to the handling of consumer data by not implementing adequate measures to protect against data security incidents. According to the CFPB. in the event of large scale, customer-base-wide breaches, consumers may become victims of targeted identify theft.Continue Reading CFPB: Safeguard Consumer Data or Face Liability
Last month, the CFPB utilized its market monitoring authority to issue a series of orders to five companies offering “buy now, pay later” credit. Buy now, pay later, or BNPL, is a deferred payment option that allows consumers to split a purchase into smaller installments, typically four or less, often with a down payment of 25 percent due at checkout.
Continue Reading CFPB’s Latest Orders Place Data Practices Front and Center for 2022