FTC Defense Lawyer Alert: FTC Completely Hip to Partials by Richard B. Newman, August 29, 2017 Subscription-based billing models that fail to lawfully disclose material terms and obtain express informed consent are going to draw the attention of the Federal Trade Commission. No news there. Recently, however, prosecuting staff attorneys have developed an interesting line of questions pertaining to a narrow issue during investigational hearings of negative options marketers. This line of questions goes beyond the “traditional” FTC Act and Restore Online Shoppers’ Online Confidence Act investigational inquiries. The monetization of partial consumer data. FTC staff attorneys are now displaying a particular interest in partials, including whether consumers know and consent to their personal data being captured and used for marketing purposes when they drop-off prior to final completion of the transaction. The timing is not a coincidence. The Commission has gone to great lengths recently to bolster its consumer protection mission as the primary U.S. privacy and data security enforcer. The agency has also been paying a great deal of attention to the lead generation industry. See here and here. Given today’s regulatory landscape, there is an inherent risk of failing to advise consumers, clearly and conspicuously, of how and when their information will be collected and used at all stages of the process. Of course, this risk is heightened if there is ultimately a telemarketing component employed to monetize partial leads. The FTC is not likely to take the position that burying such disclosures in a privacy policy is enough, especially considering that consumers who fill out web forms may not realize they are operated by lead generators. Marketers should take precautionary steps to ensure that they are in a defensible position with respect to these issues, including disclosing that consumer information can be sold and re-sold multiple times. Recent inquiries by the FTC into the use of partials clearly evidence a growing level of regulatory sophistication. Adding transparency to the lead generation process in conjunction with an already high-risk billing model is sound practice. Contact an FTC defense attorney if you are interested in implementing preventative compliance measures, or if your company is the subject of a local, state or federal regulatory investigation or enforcement actions. Richard B. Newman is an Internet marketing compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35thFloor, New York, NY 10005 | (212) 756-8777 Filed under: Blue Book, Revenue Tagged under: FTC defense attorney, FTC defense lawyer About the Author Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP. He is a nationally recognized FTC defense lawyer and advertising compliance attorney. He regularly provides advertising counsel and represents clients in high-profile investigations (CIDs) and enforcement proceedings initiated by the Federal Trade Commission, state attorneys general, departments of consumer affairs, and other federal and state agencies with jurisdiction over advertising and marketing practices. Richard’s practice also concentrates upon transactional matters relating to the dissemination of national advertising campaigns, including the gamut of affiliate marketing, telemarketing, lead generation, list management and licensing agreements.