FTC Settlements with Lead Generators Offer Roadmap for Consumer Consent and Telemarketing Pitfalls to Avoid

Venable LLP

Marketers and lead generators have new guidance in the form of enforcement orders on what the Federal Trade Commission (FTC) appears to consider required practice when obtaining consumer consent prior to the sale, transfer, or disclosure of consumer information that will be used in marketing.

The upshot is that the FTC provided several affirmative requirements it would want to see relating to the sale, transfer, or disclosure of consumer information by lead generators, including when obtaining consumer consent prior to transfer to a third-party marketer. But the FTC has also taken direct aim at the use of hyperlinks used to make disclosures of the identities or names of persons to whom the information will be sold and other information, prior to the consumer providing consent, a step taken by many lead generators to avoid violating the FTC Act and the Telemarketing Sales Rule (TSR).

The FTC and other federal and state law enforcement partners recently announced “Operation Stop Scam Calls.” A focus of the announcement was several enforcement actions against marketers and lead generators, including actions where the FTC alleged the defendants acted as “consent farms,” which, in the FTC’s opinion, improperly obtained consumers’ consent by using deceptive ads and “dark patterns” to trick consumers into providing their personal information and consenting to receive prerecorded calls and other marketing solicitations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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