Download A Kick Start to Legal Marketing in 60 Minutes

A KICK START TO LEGAL MARKETING
IN 60 MINUTES
In 60 minutes learn how to
balance creativity with practicalities and legalities of marketing
compliance in the equipment finance landscape.
From Can-Spam to TCPA to ECOA and more,
be a savvy marketer without stepping outside the law.
ABOUT US
BOB COHEN
PARTNER
Moritt Hock & Hamroff, LLP
[email protected]
[email protected]
JACKLYNN MANNING
MARKETING DIRECTOR
Axis Capital Finance
CAN-SPAM ACT
An Overview
CAN-SPAM ACT
What does it do?
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Establishes rules and requirements for commercial messages sent by email.
Gives recipients the right to have you stop emailing them.
Sets forth tough penalties for violations.
The CAN-SPAM Act covers all commercial email messages including business-tobusiness email.
What does it stand for?
“Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003”
WHAT IS A COMMERCIAL MESSAGE?
“Any electronic mail message the primary purpose of which is the
commercial advertisement or promotion of a commercial product or
service,” including email that promotes content on commercial
websites.
WHAT IS A TRANSACTIONAL MESSAGES
EXCEPTION: Transactional Message
It is a message which only contains transactional or relationship content (i.e.,
facilitates an already agreed-upon transaction or updates a customer about an
ongoing transaction).
If your message only contains transactional or relationship content, it is exempt
from most provisions of the CAN-SPAM Act, but still cannot contain false or
misleading routing information.
COMMERCIAL VERSUS TRANSACTIONAL
MESSAGES
Commercial Content:
Transactional or Relationship content:
Advertises or promotes a
commercial product or
service, including content on
a website operated for a
commercial purpose.
Facilitates an already agreed-upon transaction
or updates a customer about an ongoing
transaction.
PRIMARY REQUIREMENTS
If the message contains only commercial content, each email must
comply with all the following CAN-SPAM requirements:
PRIMARY REQUIREMENT #1
You must (in each email):
• Avoid false or misleading header information.
o Header information includes the email's "From," "To," “Reply-to” and routing
information (originating domain name and email address).
Be accurate—identify the person who initiated the message.
PRIMARY REQUIREMENT #2
You must (in each email):
• Avoid deceptive subject lines.
Examples of Deceptive Subject Lines:
• You are approved for a $10,000!
• Re: Important Information Regarding Your Business
• JANET! – Here’s Money You Never Knew You Had
• Don’t Wait Any Longer
• Every Second Counts
• Your Loan/Financing/Capital Is Waiting
The subject line must accurately reflect the content of the message.
PRIMARY REQUIREMENT #3
You must (in each email):
 Identify the message as an advertisement.
PRIMARY REQUIREMENT #4
You must (in each email):
• Advise recipients where you’re located.
o Valid physical postal address
o Post office box registered with the U.S. Postal Service
o Private mailbox registered with a commercial mail receiving agency established
under Postal Service regulations
PRIMARY REQUIREMENT #5
You must (in each email):
• Advise recipients how to opt-out of receiving future email from you.
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Clear and conspicuous explanation of how to opt out
Ordinary person must be able to understand
Use type size, color, and location for clarity
Provide a return email address or another easy Internet-based way to communicate choice
Opt out menu allowed, but must include option to stop all commercial messages from you
One of the most important parts of an email is your valid physical postal address. An easy way
to make sure you remember to include your address is to put it in your email template.
PRIMARY REQUIREMENT #6
You must (in each email):
• Honor opt-out requests promptly
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Opt-out mechanism must last for at least 30 days AFTER you send your message
Must honor opt-out request within 10 business days
Can’t charge a fee
Can’t require any personally identifying information beyond email address
Can’t require any step other than sending a reply email or visiting a single page on an Internet
website as a condition for honoring opt-out request
Can’t sell or transfer opt-out email addresses, except to a company you’ve hired to help comply
with CAN-SPAM
Allowing people to unsubscribe is an important rule to keep in mind because
anyone receiving your emails should actually want to receive them -- otherwise,
you're just spamming them.
PRIMARY REQUIREMENT #7
You must (in each email):
• Monitor what others are doing on your behalf
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Even if you hire another company to handle your email marketing, you can’t contract away
your legal responsibility to comply with the law
MIXED MESSAGES?
It depends on how a reasonable recipient would interpret the message.
What to consider:
 Subject line (It's a big deal!)
 Location of the commercial content within the email.
 Color, graphics, type size, style, etc.
WHAT ARE THE RISKS?
Penalties of up to $16,000 per email.
KOBENI INC. - $350,000 judgment for failing to provide
consumers the opportunity to decline to receive future
emails, and a valid physical postal address.
TCPA
An Overview
WHAT IS THE TCPA?
The Telephone Consumer Protection Act of 1991 ( “TCPA”) was enacted
in 1991 to address certain practices thought to be an invasion of
consumer privacy and a risk to public safety.
Statute: 47 U.S.C. § 227.
FCC Regulations: 47 CFR §64.1200 et seq.
WHAT IS PROHIBITED?
• Prohibits telemarketing calls using an artificial or prerecorded voice
to a residential telephone.
• Prohibits any call using an autodialer or an artificial or prerecorded
voice to a wireless telephone.
• Establishes the type of consent required to make certain types of
autodialed or prerecorded/artificial-voice calls.
• Restricts unsolicited faxes (whether or not sent by an autodialer!)
UNSOLICITED FAXES
It is unlawful “to use any telephone facsimile machine, computer, or
other device to send, to a telephone facsimile machine, an unsolicited
advertisement. . .” §227(b)(1)(C).
“Unsolicited advertisement” means “any material advertising the
commercial availability or quality of any property, goods, or services
which is transmitted to any person without that person’s prior express
invitation or permission, in writing or otherwise.”
EXCEPTION: PRIOR BUSINESS RELATIONSHIP
It is not unlawful to send an unsolicited advertisement from a sender
with an established business relationship with the recipient.
§227(b)(1)(C)(i).
However, all solicited and unsolicited advertisements sent by fax must
contain an opt-out notice.
The FCC’s rules require that a “facsimile advertisement that is sent to a
recipient that has provided prior express invitation or permission to the
sender must include an opt-out notice that complies with the
requirements in [section 64.1200(a)(4)(iii)].”
OPT-IN MARKETING PROCEDURES
Telephone
• Make it part of the sales process
• Customer service calls
Text Message
• User-initiated texts
• Consider a double opt-in process or authentication
process
Email
• Replies to email
• Redirect customers to company-controlled website to
capture written consent
U.S. Mail
• Postcards
• Account statements
OPT-IN MARKETING EXAMPLES
OPT-OUT NOTICE
The rules specify that the opt-out notice contained in fax
advertisements must:
(1) be clear and conspicuous and on the first page of the
advertisement;
(2) state that the recipient may make a request to the sender not to
send any future advertisements and that failure to comply, within 30
days, with such a request is unlawful; and
(3) contain a domestic contact telephone number and fax number
for the recipient to transmit an opt-out request.
OPT-OUT NOTICE
Fax advertisements sent pursuant to an established business
relationship must also contain this opt-out information.
Even if the fax sender places an opt-out notice on its fax advertisement,
it will not comply with the law unless the opt-out notice satisfies each
requirement contained in the rule.
TCPA TIPS
How to prepare for TCPA for your business marketing:
• Understand the law as applied to your business
• Prepare appropriate policies and procedures
• Train all your employees
• Create a customer complaint “feedback loop”
• Maintain good records
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Store consent records for at least 4 years
Carefully document the date and substance of any changes
Create a storing method so you can easily access, search, and retrieve relevant data
Document the process and technology used to sent text messages and/or make calls
Monitor and test your policies
Be aware of State and Federal laws
WHAT IS THE RISK?
 $500 per violation (i.e., per call, text message or fax).
 Strict liability statute.
Can be increased up to $1,500 for a “willful” or “knowing” violation in
court’s discretion.
ECOA
An Overview
WHAT IS ECOA?
The Equal Credit Opportunity Act (ECOA) was enacted in 1974. The
purpose of the act is to ensure that all consumers are given an equal
chance to obtain credit. Anyone involved in granting credit, such a
broker who arranges financing, is covered by the law.
Codified at: 15 U.S.C. § 1691 et seq.
APPLYING FOR CREDIT
A CREDITOR MAY NOT...
 Ask them to reveal their sex, race, national origin, or religion.
 Ask if they are widowed or divorced.
 Ask about marital status when applicant applies for a separate,
unsecured account.
OR
 Discourage the applicant from applying because of sex, marital
status, age, race, national origin, or because they receive public
assistance income.
APPLYING FOR CREDIT
A CREDITOR MAY NOT...
Request information about applicant’s spouse, except when:
 their spouse is applying with them,
 their spouse will be allowed to use the account,
 they are relying on their spouse’s income,
 they are relying on the alimony or child support income from their
former spouse; or
 they reside in a community property state.
Inquire about plans for having or raising children.
However, a creditor may ask if they have to pay alimony, child support, or
separate maintenance payments.
IN DECIDING TO GIVE CREDIT,
A CREDITOR MAY NOT CONSIDER...
 sex, marital status, race, national origin, or religion.
 whether the applicant has a telephone listing.
 the race of people in the neighborhood where applicant plans to buy,
refinance or improve a house.
IN DECIDING TO GIVE CREDIT,
A CREDITOR MAY NOT CONSIDER...
Age, unless:
 Applicant is too young to sign contracts.
 Applicant is 62 or older, and creditor will favor them because of age.
 To determine the meaning of other factors important to
creditworthiness.
 It’s used in a valid scoring system that favors applicants age 62 and
older.
WHEN EVALUATING APPLICANT’S INCOME,
A CREDITOR MAY NOT...
 Consider public assistance income differently than other income.
 Discount income because of sex or marital status.
 Discount or refuse to consider income because it comes from parttime employment or pension, annuity, or retirement benefits
programs.
 Refuse to consider regular alimony, child support, or separate
maintenance payments.
OTHER REQUIREMENTS
A creditor must provide notice if it has taken adverse action on an application.
Creditor may not use indefinite or vague reasons to reject an application:
 Acceptable reasons include: "Your income was low," or "You haven’t been
employed long enough."
 Unacceptable reasons are: "You didn’t meet our minimum standards," or
"You didn’t receive enough points on our credit-scoring system."
Creditor must provide:
 why they offered less favorable terms than what was applied for.
 why they closed an account or changed the terms of an account to
something less favorable.
WHAT IS THE RISK?
Failure to comply with the Equal Credit Opportunity Act can subject a
financial institution to civil liability for actual and punitive damages.
Liability for punitive damages can be:
 as much as $10,000 in individual actions, and
 the lesser of $500,000 or 1% of the creditor’s net worth in class
actions.
BEST PRACTICES
Guidance for Direct Mail, Email, Websites & Testimonials
GENERAL MARKETING BEST PRACTICES
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Claims made in advertising must be accurate and, if applicable, supported by
substantiation. Claims that are capable of being supported by substantiation
(that is, objective claims that can be measured) should have that support.
Fine print can be used to explain more prominent information; it should not be
used to change the meaning of more prominent information.
Marketing material should not mislead recipients about the material’s
purpose. For example, marketing material presenting an unsolicited loan offer
should not imply that the material is non-sales information rather than a sales
pitch or that the material relates to an existing credit account when that is not
the case.
Marketing material should not mislead recipients about their approval
status. Unsolicited marketing material should not represent that the recipient
has already been approved for credit if that is not the case.
GENERAL MARKETING BEST PRACTICES
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The terms “pre-approved” and “pre-qualified” have attracted regulator
scrutiny. The results of that scrutiny have been inconsistent, so all marketers
should proceed with caution before using these terms. This applies to the
prescreening context, where these terms are used most frequently. If the
recipient will be subject to subsequent creditworthiness evaluation prior to
approval, these terms should not be used. “Pre-selected for this offer” is one
alternative.
The FTC has taken the position that “up to” and “as little as” claims include the
implied representation that reasonable consumers are likely to achieve the
maximum benefit (that is, the highest “up to” figure and the lowest “as little as”
figure). As a result, advertisers should have substantiation supporting that fact.
Marketing material should not imply a government connection or endorsement.
GENERAL MARKETING BEST PRACTICES
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In general, the less conditional a claim is, the more likely it is to attract
regulator scrutiny. For example, a claim about “all competitors” is not
conditional at all and should not be made without support. A claim about
“most competitors” represents that the claim applies to more than half of the
competitors. A claim about “many competitors” is the most conditional and
therefore should attract the least amount of scrutiny, but still should be
supported by some evidence.
BEST PRACTICES | DIRECT MAIL
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Envelope design or content must not imply a government connection. This
includes symbols and logos associated with the government as well as literally
true statements about the illegality of tampering with mail delivery that have the
effect of creating the impression that the mailer is from the government.
Facsimile checks are widely regulated at the federal and state levels. These
standards are not consistent, and it is difficult, if not impossible, to create single
facsimile check solicitation that can be used across various jurisdictions that
regulate this practice.
If using a credit card insert in a direct mail piece, you should take steps to
ensure that the card does not resemble an actual credit or debit card that could
be used to access funds. This means that design elements such as a magnetic
stripe on the back, a hologram icon on the front, and a signature line for the
recipient are not recommended.
BEST PRACTICES | EMAIL
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The “from” line and header information of all messages must be truthful and
not misleading.
The subject line of commercial messages may not be deceptive. Subject
lines that are ambiguous or misstate the relationship between the parties or
the recipient’s status should be avoided.
Avoid deceptive subject lines.
BEST PRACTICES | WEBSITE
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There should be sufficient contrast between text and background.
Applying the “clear and conspicuous” standard online, use of fine-print
disclaimers that are not on the audience’s initially viewable screen introduces
risk of a challenge, unless there is a prominent disclosure directing the audience
to the information.
When attempting to obtain consent from applicants and customers via an online
web site form, using a pre-checked box is not recommended. It is generally
understood that consent must be informed or knowing to be valid. Pre-checked
boxes may be challenged under that standard as inadequate evidence of
informed or knowing consent. Electronic written consent is preferred.
Hyperlinks to material information should be easily identifiable as links, and the
link should take the audience directly to that material, or relevant information.
Make sure to have a Terms Of Use and Privacy Policy easily accessible
throughout your website.
BEST PRACTICES | TESTIMONIALS
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As a general rule, endorsements and testimonials are subject to the same
deception analysis as claims made directly by the advertiser. This means
that claims must be accurate. Further, statements from customers are
considered implied representations that reasonable consumers are likely to
experience the same results as the speaker. If a customer’s experience
was not representative, the advertiser should disclose the representative
experience along with the endorsement or testimonial. Further,
compensation paid to the endorser should be disclosed because that affects
the weight that the audience gives to the statement.
THANK YOU!
[email protected]
[email protected]