Privacy & Information Security Law Blog

On October 5, 2009, the Federal Trade Commission (“FTC”) issued amendments to its Guides for the Use of Endorsements and Testimonials in Advertising (“Guides”).  Reactions to the amendment have primarily focused on the provisions that require bloggers to disclose their relationship with companies whose products they endorse.  Largely absent from the commentary, however, have been observations regarding theories articulated in the amendments that demonstrate the risk of enforcement for companies that do not have a blog and that do not use third-party bloggers for promotion.

On October 6, 2009, the Federal Trade Commission (“FTC”) announced proposed settlement agreements with six companies over charges that they falsely claimed membership in the U.S. Department of Commerce Safe Harbor program.  In six separate complaints, the FTC alleged that ExpatEdge Partners LLC, Onyx Graphics, Inc., Directors Desk LLC, Collectify LLC, and Progressive Gaitways LLC deceived consumers by representing that they maintained current certifications to the Safe Harbor program when such certifications had previously lapsed.  The terms of the proposed settlement agreements prohibit the companies from misrepresenting their membership in any privacy, security or other compliance program.  The six enforcement actions are significant as they mark a considerable uptick in the FTC’s enforcement related to the Safe Harbor program. The FTC recently brought its first enforcement action relevant to the program, which is detailed in our post titled FTC's First Safe Harbor Enforcement Action.

On July 29, 2009, the Federal Trade Commission ("FTC") announced another three-month delay in the enforcement of the provision of Identity Theft Red Flags and Address Discrepancies Rule (the "Rule") that requires creditors and financial institutions to implement an Identity Theft Prevention Program.  The FTC noted that small businesses and entities with a low risk of identity theft remain uncertain about their obligations under the Rule and pledged to "redouble" its efforts to educate businesses about compliance with the Rule.  The new enforcement deadline for creditors and ...

The Federal Trade Commission (“FTC”) recently issued new rules and guidelines to promote the accuracy of consumer information included in credit reports.  The final rules and guidelines were issued in conjunction with the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision (the “Agencies”) pursuant to Section 312 of the Fair and Accurate Transactions Act of 2003 (“FACTA”).  The Agencies’ release regarding the new rules, entitled “Procedures to Enhance the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies Under Section 312 of the Fair and Accurate Credit Transactions Act” and “Guidelines for Furnishers of Information to Consumer Reporting Agencies,” was issued on July 1, 2009.  The final rules and guidelines will take effect on July 1, 2010. 

On May 5, 2009, the Federal Trade Commission’s ("FTC's") Acting Director of the Bureau of Consumer Protection, Eileen Harrington, testified before the House Energy and Commerce Committee Subcommittee on Commerce, Trade and Consumer Protection in support of the proposed federal Data Accountability and Trust Act (H.R. 2221).  The Act would require companies to implement reasonable data security policies and procedures to protect personal information.  It would also mandate security breach notifications for consumers affected by data security breaches.

At the eleventh hour, the Federal Trade Commission announced that it will once again delay enforcement of the Red Flags Rule.  The Red Flags Rule was promulgated pursuant to the Fair and Accurate Credit Transactions Act of 2003 ("FACTA").  The previous compliance date was May 1, 2009, which was an extension from the original deadline of November 1, 2008.  The new extension applies only to the provisions of the Rule requiring financial institutions and creditors to implement an identity theft prevention program.  The continuing enforcement delays respond to ongoing uncertainty about ...

On March 20, 2009, the Federal Trade Commission (“FTC”) published its long-awaited guide to the Red Flags Rule (the “Rule”), entitled “Fighting Fraud with Red Flags Rule:  A How-To Guide for Business.”  The guide applies to creditors and certain financial institutions (such as state-chartered credit unions and mutual funds that offer accounts with check-writing privileges) that are subject to the FTC’s jurisdiction and addresses the provision of the Rule that requires implementation of an Identity Theft Prevention Program.  For entities subject to the FTC’s jurisdiction, the relevant compliance deadline is May 1, 2009.  Financial institutions that are regulated by federal bank regulatory agencies or the National Credit Union Administration (which issues their own versions of the Red Flags Rule) were required to comply with the Rule as of November 1, 2008.

On March 20, 2009, the Federal Trade Commission published a Red Flags Rule compliance guide for businesses, entitled “Fighting Fraud with the Red Flags Rule.”  The guide offers an overview of the Rule and practical steps businesses need to take to comply.  In addition, the guide addresses the issue that has raised the most concern among businesses -- the Rule's scope.  As expected, the FTC is interpreting the Rule broadly, suggesting, for example, that any company that sells goods or services and bills customers later is a "creditor" subject to the Rule.  According to the guide ...