CFPB Puts Digital Marketers in the Cross-Hairs

On August 10, 2022, the Consumer Financial Protection Bureau (“CFPB”) issued an interpretive rule aimed at digital marketers that provide services to financial service companies (the “Interpretive Rule”). The Interpretive Rule seeks to clarify when such digital marketers are required to comply with federal consumer protection law. The short answer is that whenever a marketer goes beyond merely providing “time or space” for advertisements, they are now at risk of running afoul of the CFPB or any other agency with the power to enforce consumer financial protection laws.

The specific impetus for the Interpretive Rule are those digital marketers that take part in the identification or selection of target customers or where advertising content should be placed in order to best influence consumer behavior. According to the CFPB, such providers can, if they are not careful, be held liable by the CFPB and other law enforcement agencies for committing unfair, deceptive, or abusive acts or practices.

In issuing the Interpretive Rule, the CFPB is quick to distinguish between digital marketers that harvest personal data and create behavioral models in an effort to maximize an individual’s interaction with a particular advertisement, from more traditional marketers that merely provide “time or space” for an advertisement through print, newspaper or electronic media. These latter, more traditional, advertisers are not the subject of the Interpretive Rule. Advertisers that go beyond these traditional roles, however, including ones that develop content strategy, risk running afoul of the consumer financial protection laws.

Digital marketers that work with banks or consumer financial service companies should be aware that their advertising and behavioral targeting techniques may come under scrutiny from the CFPB and other agencies for potential UDAAP violations. This includes ensuring that such techniques do not implicate any discriminatory practices, which the CFPB noted in a previous update to its supervisory operations may meet the criteria for “unfairness” by causing substantial harm to consumers that they cannot reasonably avoid.

The CFPB’s press release announcing the Interpretive Rule can be found here.

A copy of the Interpretive Rule can be found here.