The FTC has been aggressive wrapping up the fiscal year before the Labor Day weekend—it initiated several actions across various industries, protecting consumers from sensitive data leak to deceptive “pre-approved” credit offers. The Commission also issued its E-Cigarette Report for 2019-2020, which highlights dramatic surge in sale of flavored disposable e-cigarettes and menthol e-cigarette cartridges. Last but not the least, the FTC is sending checks totaling more than $1.9 million to consumers who bought Hubble brand contact lenses from Vision Path, Inc. This story and more after the jump.
Monday, August 29, 2022
Bureau of Consumer Protection: Privacy and Security
- The FTC is taking data broker Kochava Inc. to court for selling geolocation data from mobile devices that could be used to track people’s movement to and from sensitive locations, such as reproductive health clinics, places of worship, homeless and domestic violence shelters, and addiction recovery. In its complaint, the Commission alleges that Kochava, by selling location information, puts consumers at significant risk and can expose them to threats of stigma, stalking, discrimination, job loss, and even violence. According to the complaint, Kochava’s data allows purchasers to identify and track specific mobile device users, including their home address. Further, Kochava fails to afford adequate protection of its data, given Kochava’s data sample is easily accessible to the public in large amounts, and could be used with no restriction. The FTC seeks through this lawsuit to halt Kochava’s sale of sensitive geolocation data.
Tuesday, August 30, 2022
Bureau of Consumer Protection: Made in USA
- The FTC sues heated mattress company, Electrowarmth, and its owner, for falsely marketing their products to truck drivers as being made in the USA, when their production has been moved to China since 2019 for cost-cutting purposes. “America’s hardworking truckers shouldn’t have to maneuver around marketers preying on their patriotism,” said Samuel Levine, Director of the Bureau of Consumer Protection. According to the complaint, the Chinese manufacturer was instructed to make and package the products “exactly the same” as they were previously made in the USA. This lawsuit is one in a series of actions the Commission has taken to enforce against deceptive Made in USA claims and labeling. Further guidance on making non-misleading Made in USA claims could be found at the FTC’s Enforcement Policy Statement on U.S. Origin Claims.
Wednesday, August 31, 2022
FTC Operations: E-Cigarette Report for 2019-2020
- The FTC issued its second report on e-cigarette, which covers sales and advertising data from 2019 and 2020. Overall, the report found that total e-cigarette sales slightly declined to $2.24 billion in 2020, after continued growth from $304.2 million in 2015 to $2.703 billion in 2019. Other key findings in the report include significant shift to flavored disposable e-cigarettes, major increase in menthol cartridge sales, record high e-cigarette discounting and doubling of nearly free e-cigarette samples. The increase of sales in flavored disposable e-cigarettes and menthol cartridge sales strongly suggests that young smokers shift to substitute products, rather than reduce tobacco product consumption, when flavored e-cigarette cartridges other than menthol are banned by the Food and Drug Administration. “This report shows that youth are still at risk from flavored or deeply discounted e-cigarettes,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Marketers of e-cigarettes have proven skillful at evading FDA regulation and hooking youth on addictive products.”
Thursday, September 1, 2022
Bureau of Consumer Protection: Credit and Loans
- The Federal Trade Commission announced a draft administrative complaint and consent agreement against credit services company Credit Karma for false claims about “pre-approved” credit card offers. According to the FTC’s complaint, Credit Karma told consumers they were “pre-approved” for credit offers, while almost a third of consumers who applied were in fact denied. This deceptive practice cost consumers significant time and effort applying for the offers they were not qualified for. More importantly, the resulting denials damaged consumers’ credit scores unnecessarily. The proposed order settling the complaint requires Credit Karma to stop deceiving consumers about whether they are pre-approved for a credit offer, to pay $3 million in consumer redress, and to preserve records to help prevent further use of deceptive dark patterns.
Bureau of Consumer Protection: Online Advertising and Marketing
- Following a stipulated order in January 2022, the FTC is sending payments with a total of more than $1.9 million to 30,172 consumers who were harmed by purchasing Hubble brand contact lenses from Vision Path, Inc. According to the FTC’s January 2022 complaint, Vision Path committed several violations of the Contact Lens Rule and the FTC Act, including by substituting its own brand of lenses for those actually prescribed to consumers, by failing to properly verify prescription while so promising consumers, and by failing to disclose that many reviews of Hubble brand lenses were written by paid reviewers.