• No results found

How The FTC Identifies, Targets & Tracks Companies Learn How to Keep Off Their List

N/A
N/A
Protected

Academic year: 2021

Share "How The FTC Identifies, Targets & Tracks Companies Learn How to Keep Off Their List"

Copied!
28
0
0

Loading.... (view fulltext now)

Full text

(1)

How The FTC Identifies,

Targets & Tracks Companies –

Learn How to Keep Off Their List

David Zetoony, Partner

Bryan Cave LLP

Leader Global Data Privacy and

Security Team

Scott J. Stein

Online Trust Alliance

(2)

About Us

• The Online Trust Alliance (OTA) is a 501c3 charitable non-profit with the

mission to enhance online trust and empower users, while promoting

innovation.

• Goal is to help educate businesses, policy makers and stakeholders

while developing and advancing best practices and tools to enhance the

protection of users' security, privacy and identity.

• Supports collaborative public-private partnerships, benchmark reporting,

self-regulation and data stewardship.

(3)

1. The Who, What, Where, Why of the FTC

2. How the FTC Identifies Enforcement Targets

3. Data Analytics and Company Tracking

(4)

1. The Who, What, Where, Why of the FTC

4

The Who & What:

• Established in 1914

• Independent Federal Agency

• 5 person Commission

(2 from minority party, 3 from majority)

• 1,164 full time employees (654

attorneys)

• ~$300 million budget

The Where:

• Headquartered in DC

(5)

1. The Who, What, Where, Why of the FTC

.

The Why:

• Enforces more than 70 laws* including:

Federal Trade Commission Act,

Consumer Leasing Act

CAN-SPAM Act

Credit CARD Act

Do-Not-Call Registry Legislation

Fair Credit Reporting Act

Fair and Accurate Credit Transactions Act

Fur Products Labeling Act

Gramm-Leach-Bliley Act

Identity Theft Act

Equal Credit Opportunity Act

The FTC’s Consumer Protection Mission:

Data Privacy

Data

Security

Marketing

(6)

2. How the FTC Identifies Enforcement

Targets

6

(A) Independent Monitoring of Companies

(B) Competitor / Industry / Interest Group Petitions

(C) Media Attention

(7)

2. How the FTC Identifies Enforcement

Targets

(A) Independent Monitoring of Companies

Formal programs are set up to monitor

• FTC Mobile / Internet Lab for reviewing websites

• Industry / Issue Sweeps.

• E.g., Children’s Apps:

Staff searched for “Kids” in App Store

Collected Promotion page for first 960 apps

Conducted closer review of 480 (of the 960) chosen at random

Don’t overlook informal monitoring… and remember that FTC staff members,

Commissioners, and relatives of staff members are consumers too.

(8)

8

2. How the FTC Identifies Enforcement

Targets

(A) Independent Monitoring of Companies (Cont.)

FTC v. DERMAdoctor, Case No. 14-01129-CV-W-BP (W.D. Mo. 2014)

(9)

2. How the FTC Identifies Enforcement

Targets

(10)

2. How the FTC Identifies Enforcement

Targets

10

(B). Competitor / Industry / Interest Group Petitions (Cont.)

November 22, 2011: Humane Society

Petition to FTC in re DrJays.com,

Eminent, Gilt Groupe, Inc., Neiman

Marcus, etc.

March 19, 2013:

Complaint, In the Matter of DrJays.com, Inc.

(Docket No. C-4408)

Complaint, In the Matter of Eminent, Inc. (Docket

No. C-4409)

Complaint, In the Matter of the Neiman Marcus

Group (Docket No. C-4407)

(11)

2. How the FTC Identifies Enforcement

Targets

(C) Media Attention: Example

In the Matter of CVS, Docket No. C-4259

Sept. 2007: FTC initiates non-public inquiry of CVS and issues an

access letter to CVS.

May 20, 2008: FTC issues a Civil Investigative Demand to CVS

Feb. 18, 2009: Complaint

(12)

2. How the FTC Identifies Enforcement

Targets

12

(C) Media

Attention

(cont.):

Exp.

In the Matter of Ceridian Corp.

, Docket No. C-4325

Feb. 3, 2010

May 3, 2011 FTC Complaint

(13)

2. How the FTC Identifies Enforcement

Targets

(D). Data Mining

The FTC maintains databases of consumer complaints collectively

referred to as “Consumer Sentinel”:

Started in 1997

Contains complaints submitted to FTC

by phone or online.

Contains complaints submitted to

partner agencies including:

• 20 state attorneys general

• 8+ federal agencies

• 100+ Better Business Bureaus

Over 25 million total complaints*

(14)

14

The majority of FTC actions

target a company identified in

Consumer Sentinel

*

F

(15)

2(D). Data Mining (cont.)

How the FTC uses Consumer Sentinel:

• Each month the FTC’s Division of Planning and Information (“DPI”)

creates a “Top Violators Report” that ranks the fifty companies with the

greatest volume of consumer complaints that month

(16)

16

NOTES: Top Violators February 2012

Top Companies Receiving Complaint in Consumer Sentinel Network November 1 to November 30, 2014

Rank November

Rank

October Company Product/Service Code(s)

# of Complaints Entered During Reporting Period

1 1 IRS Imposter Impostor: Government 8,293

2 2 Publishers Clearing House Imposter Impostor: Business 3,342 3 3 Microsoft Corporation Computers: Equipment \ Software; Impostor: Business 1,333

4 4 AT&T Mobile: Other 1,289

5 5 Verizon Wireless Mobile: Other 1,078

6 7 Bank of America Lending: Mortgage; Bank: National \ Commercial 813

7 8 Wells Fargo Bank Lending: Mortgage 748

8 6 Comcast Cable Television: Satellite & Cable 734 9 9 DirecTV, Inc. Television: Satellite & Cable 609

10 11 Experian Credit Bureaus 607

11 10 Us Treasury Impostor: Government 539

12 13 Equifax Credit Bureaus 525

13 12 T Mobile Mobile: Other 459

14 14 TransUnion Credit Bureaus 459

15 16 Federal Government Impostor: Government 451

16 Credit One Bank Credit Cards 341

17 17 Time Warner Cable Television: Satellite & Cable 320 18 19 Ocwen Loan Servicing, LLC Lending: Mortgage 319

19 22 Capital One Bank Credit Cards 300

20 20 Medicare Impostor: Government 271

21 Federal Grant Department Impostor: Government 268 22 18 Dish Network LLC Television: Satellite & Cable 256 23 21 Credit Card Services Telemarketing: Other 250 24 30 Nationstar Mortgage Lending: Mortgage 247

25 29 FTC Imposter Impostor: Government 234

26 27 JP Morgan Chase Lending: Mortgage / Bank: National\Commercial 234

27 24 Chase Lending: Mortgage 229

28 36 Wal-Mart Impostor: Business 226

29 28 Green Tree Servicing, Llc Lending: Mortgage 218 30 34 Charter Communications Inc Television: Satellite & Cable 203 31 36 Cash Net USA Third Party Debt Collection / Lending: Payday Loans 199

32 42 Citibank Credit Cards 195

33 15 eBay Shop-at-Home \ Catalog Sales 194

34 46 Cash Advance Advanced Feel Loans, Credit Arrangers 189

35 32 Synchrony Bank Credit Cards 186

36 Enhanced Recovery Corporation Information Furnishers 185 37 38 Government Grants Impostor: Government 184 38 25 Amazon.com Shop-at-Home \ Catalog Sales 183 39 40 Midland Credit Management Third Party Debt Collection 179 40 26 Craigslist Shop-at-Home \ Catalog Sales 176

41 31 Sallie Mae Lending: Mortgae 174

42 39 Verizon Third Party Debt Collction 163

43 35 Wells Fargo Home Mortgage Lending: Mortgage 162

44 23 FBI Impostor: Government 141

45 43 Mega Millions Prizes \ Sweepstakes 139

46 Cardholder Services Telemarketing: Other 135 47 41 Dell Computer Corporation Impostor: Government 133 48 US Government Grants Impostor: Government 127

49 American Express Credit Cards 125

50 33 US Bank Bank: National / Commercial 122

Top Violator’s Report From Nov. 2014

(17)

(D). Data Mining (cont.)

How the FTC uses Consumer Sentinel:

• Each month the FTC’s Division of Planning and Information (“DPI”)

also creates a “Surge Report” that identifies companies with the greatest

increase, or “surge,” in complaint volume.

(18)

18

Surge Report from October 2014

(19)

Although it is impossible to know how often the FTC takes actions based upon the top violators / surge

reports (among other things investigations that do not lead to enforcement actions are typically not

made public), there does appear to be a high correlation between the report and FTC action. For

example, the FTC identified the following companies as the top violators between 1/1/2009 and

12/12/2014:

Rank

Company

FTC Action

1

Publisher’s Clearing

House Imposters

Consumer Information Press Release 2014

http://www.consumer.ftc.gov/articles/

0199-prize-scams)

2

Bank of America

OUTSIDE FTC JURISDICTION

3

T Mobile

12/19/2014 FTC Law Enforcement Action resulting in $90 million consumer

redress.

http://www.ftc.gov/news-events/press-releases/2014/12/t-mobile-pay-least-90-million-including-full-consumer-refunds.

4

DirectTV, Inc.

2009 FTC Law Enforcement Action resulting in $2.31 million civil penalty.

3. Data Analytics and Company Tracking

(20)

20

Other ways in which the FTC could use information when analyzing specific

companies:

Complaints that are received directly by the FTC are coded to reflect

a specific area of law that has been allegedly violated.

When analyzed the statute codes can give the FTC a “profile” of potential

compliance problems

(21)

Other ways in which the FTC could use information when analyzing specific

companies:

When complaint volume and date are analyzed they can also provide insight concerning trends and

patterns within a company. The following shows the complaint volume of MySpace before the FTC

issued its complaint (

In the Matter of MySpace LLC,

Docket No. C-4369 (Sept. 11, 2012)).

6

8

10

12

14

16

18

20

Case Study

2013 Enforcement Target

Date of Submission CIS-Related Complaints

(n=534)

(22)

22

Other ways in which the FTC could use information when analyzing specific

companies:

(23)

Other ways in which the FTC could use information when analyzing specific

companies:

If viewed geographically, complaint volume may disclose distribution or regional marketing related

issues.

When lined up against competitors as a “benchmark” it may disclose practices that appear out of sync

within an industry.

(24)

24

Practical take-aways for in-house counsel:

• Self-Monitoring.

• Do you track the quantity of complaints that appear in the FTC’s

database about your company?

• If so, how often?

• Do the complaints filed against your company suggest a legal

compliance issue?

• If so, were a FTC investigation to be initiated can you explain the

complaint volume, patterns, and trends?

(25)

Practical take-aways for in-house counsel:

• Evaluating your Risk Level

• Is your complaint volume high enough to put you on the Top Violator’s

Report?

• Is the variation in complaint volume large enough to place you on the

Surge Report?

(26)

26

Practical take-aways for in-house counsel:

• Benchmarking

• Do competitors in your industry have a significantly greater or smaller

proportion of complaints?

(27)

Practical take-aways for in-house counsel:

• Other Companies

• Are there other companies for which it would be important to know their

complaint volume (e.g., clients, service providers, business partners)?

3. Data Analytics and Company Tracking

(28)

David A. Zetoony

Bryan Cave LLP

David Zetoony is the leader of the firm's global data privacy and security practice. He

has extensive experience advising clients on how to comply with state and federal

privacy, security, and advertising laws, representing clients before the Federal Trade

Commission, and defending national class actions. He has assisted hundreds of

companies in responding to data security incidents and breaches, and has represented

human resource management companies, financial institutions, facial recognition

companies, and consumer tracking companies before the Federal Trade Commission

on issues involving data security and data privacy.

Phone:

202 508 6030

Fax:

202 220 7330

Email:

david.zetoony@bryancave.com

References

Related documents

Social media platforms, such as Facebook and Twitter have given professional sports teams the opportunity to increase brand awareness and fan engagement.. For sports fans, social

This report updates and expands previous CDC guidelines for hepatitis B surface antigen (HBsAg) testing to identify persons with chronic hepatitis B virus (HBV) infection. The

Funding: Black Butte Ranch pays full coost of the vanpool and hired VPSI to provide operation and administra- tive support.. VPSI provided (and continues to provide) the

These roots can be gathered in late March, April or early May, ideally in full or partial sun, so that the scented compounds in the roots have more time to gather strength..

schools should consider adapting the medical school model to legal education, crafting a curriculum that: (1) teaches foundational doctrine in the core subjects during the first

One underutilized path for students to strengthen those skills is the required sequence of laboratory courses, where students write reports that are evaluated by graduate teaching

In the desperate search for a solution to the human popula- tion problem, space was for a while the great escape from ratio- nality: we would just ship off the earth's increase

In previous work we have drawn attention to the relative absence of British Chinese voices in public culture (Parker 1995; Song 1999). No one is more aware of this invisibility