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
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.
1. The Who, What, Where, Why of the FTC
2. How the FTC Identifies Enforcement Targets
3. Data Analytics and Company Tracking
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
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
2. How the FTC Identifies Enforcement
Targets
6
(A) Independent Monitoring of Companies
(B) Competitor / Industry / Interest Group Petitions
(C) Media Attention
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
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)
2. How the FTC Identifies Enforcement
Targets
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)
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
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
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
The majority of FTC actions
target a company identified in
Consumer Sentinel
*
F
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
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