Every quarter, our Marketing Compliance and Enforcement Actions Quarterly Review takes a deep dive into the most recent data and trends affecting consumer finance companies. This review, driven by our comprehensive compliance monitoring and industry analysis, provides essential insights to help businesses navigate the evolving regulatory landscape.
Here is a summary of the top findings from Q2 2024.
Enforcement Actions
In the second quarter of 2024, federal and state regulators finalized 12 marketing compliance and consumer protection enforcement actions, totaling a hefty $71M in monetary fines.
- Largest Fine: The highest monetary fine from a single enforcement action was $43 million, taken by the FTC against a financing company for misleading consumers about financing terms and rates.
- State Actions: 33% of these finalized enforcement actions came from state regulatory agencies, specifically New York, Massachusetts, and Virginia.
- Common Themes: Recurring issues in these enforcement actions and ongoing cases included deceptive advertising and marketing practices, misleading “free,” “unlimited,” and similar claims, and brand misrepresentations and misuse.
Recent Regulatory Updates
The past quarter was marked by significant regulatory activity impacting marketing compliance, spanning several industries, products, and regulatory agencies.
Some key updates include:
- The CFPB’s Constitutionality: The CFPB’s funding structure was ruled constitutional by the Supreme Court, and now the Bureau plans to go full steam ahead with enforcement actions and other regulatory updates that were paused.
- Late Fee Rule: The CFPB’s late fee rule, initially blocked, is now headed back to court after the Supreme Court’s decision.
- BNPL Regulation: BNPL products will be regulated the same as credit cards according to the CFPB’s interpretive rule.
- Third Party Risk Management: Federal regulators issued updated existing third party risk management guidance to provide more clarity and specific details to help banks manage risks.
- FDIC Advertising Rule: The FDIC’s updated advertising rule went into effect on April 1st, 2024, which clarified its existing regulations regarding false advertising, misrepresentations of deposit insurance coverage, and misuse of the FDIC’s name or logo.
- Repeat Offenders: The CFPB is establishing a registry to detect and deter repeat offenders who have broken consumer protection laws.
Consumer Complaints
In 2024 so far, the CFPB has received over 986,000 complaints, marking a 70% increase from the same period last year.
- Top Complaints: The most common complaints were related to credit reporting and debt collection.
- Other Complaints: Credit cards, checking or savings accounts, and mortgages also received a high volume of complaints.
Most Common Compliance Issues
Last quarter, 1 in 5 marketing assets were flagged for compliance issues in the PerformLine platform.
The compliance issues most commonly identified include:
- Disclosures: Information that’s required to include on websites, social media profiles and posts, or other marketing materials regarding products or services.
- Offer inflation: Statements that aren’t entirely truthful or accurate and are designed to make the product or service appear more attractive than it actually is.
- Instant approval: Phrases that would imply that all consumers would be approved for a specific product immediately and without any barriers.
- Credit check: Language that mentions credit checks in relation to applying for a product or services—specifically, any language that could imply that applying would not impact the consumer’s credit.
- Payday: Often used by fraudulent third party websites to falsely promote products or services as payday loans, quick cash, or instant money, often misusing brand names, logos, and information to trick consumers.
Get the full marketing compliance review
For more insights and details, download a free copy of the Marketing Compliance and Enforcement Actions Quarterly Review for Q2 2024.
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