On May 30, 2019, the FTC provided the CFPB its 2018 Annual Financial Acts Enforcement Report, which summarizes the FTC’s enforcement activities related to regulations implementing the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA). The information in the report was requested by the CFPB to be used in preparing the CFPB’s 2018 Annual Report to Congress.
The report is broken up in two parts, and the first part covers the enforcement actions, research and policy efforts, and consumer and business education efforts relating to Regulation Z, which implements the TILA, and Regulation M, which implements the CLA. This section of the report highlights the different law enforcement actions involving deceptive automobile dealer practices, pay lending practices, and consumer electronics financing practices. Additionally, the FTC points out that its policy efforts include (1) a qualitative study of consumer’s experience purchasing and financing automobiles at dealerships; and (2) the different initiatives undertaken by the FTC’s Military Task Force, which is aimed at providing resources for military consumers and identifying their needs and formulating initiatives to empower servicemembers, veterans, and their families. Finally, in this section of the report, the FTC also highlights the issuance of several blog posts discussing the FTC’s cases and other initiatives in the areas of automobiles, military consumer issues, and payday lending.
The second part of the report relates to the FTC’s activities relating to Regulation E, which implements the EFTA. This section highlights the FTC’s enforcement actions dealing with “negative option” plans. These are plans where a consumer typically agrees to receive various goods or services from a company for a trial period at no charge or at a reduced price. The company will generally also obtain, sometimes through misrepresentations, the consumer’s debit or credit card number. The EFTA and Regulation E prohibit companies from debiting a consumers’ debit cards, or using other electronic fund transfers to debit their bank accounts, on a recurring basis without obtaining proper written authorization for preauthorized electronic fund transfers and without providing the consumer with a copy of the written authorization. Further, the second part of the FTC’s report also highlights that the FTC has engaged in a number of research and policy development activities, including working with the Department of Defense interagency group on issues related to preauthorized electronic fund transfers in the Department of Defense’s military lending rule.