Bipartisan Coalition Introduces Federal Data Privacy Legislation
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Many TCPA claims involve calls erroneously directed to the wrong phone number. For purposes of the TCPA, a wrong number is defined as a misdialed number, or a number that belongs to someone other than the intended recipient of the call. While mistakes can and do occur, of particular concern is whether wrong number calls can support a multimillion dollar class action lawsuit.
Class Action Primer Among other requirements, to obtain certification the plaintiff’s attorney must demonstrate that the representative plaintiff’s claims meet the following standards:
So the question is, can a class comprised of wrong-number call recipients meet the typicality and numerosity requirements for class certification? A recent decision by a federal district court in Illinois addressed that very issue. Abdallah v. FedEx Corporate Services In ruling on class certification, the Court examined whether a class of wrong number call recipients could be determined. On the issue of typicality, the Court found that Abdallah’s claims arose from a specific course of conduct that resulted in the erroneous calls. However, the plaintiff was unable to offer any proof that anyone else who might have been mistakenly contacted by FedEx were called under similar circumstances as he was. Simply put, his claims were too specificto qualify as typical of an entire class of plaintiffs. The Court also found that Abdallah lacked sufficient proof to meet the numerosity requirement, because he could not demonstrate how many people received similar “wrong number” calls from FedEx. Unlike most companies, FedEx maintained records of wrong number calls, but even armed with this information the plaintiff was unable to locate any evidence supporting the number of potential class members who were erroneously called by FedEx under the same circumstances as he was. What Does This Mean to You? The Abdallah decision demonstrates the importance of individual fact patterns as they apply to class certification as a whole, and “wrong number” class certification in particular. Wrong number calls result from a bewildering variety of causes- they can happen after a consumer mistypes a digit into an online form, or an employee makes a data entry error, or they could be the result of a random software glitch. Compounding the difficulties inherent in wrong number cases is the fact that there exists no legal requirement for companies to maintain records of calls they erroneously placed to wrong numbers. In the SMS context, senders are rarely made aware that they contacted the wrong number, as consumer responses to such messages are often treated like any other opt-out request. No records means no evidence, and no evidence means no class. |
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On March 28, the FCC announced the execution of a Memorandum of Understanding (MOU) with the Attorney Generals of Connecticut, District of Columbia, Idaho, Kentucky, Minnesota, New Jersey, and Wyoming establishing formal robocall investigation partnerships with those states. These new partnerships bring the total number of state-federal robocall partnerships to 22.
The MOU between the FCC and the states sets forth the parameters of a partnership between state robocall investigators and the FCC’s Enforcement Bureau, and establishes critical information sharing and cooperation structures to investigate spoofing and robocall scam campaigns. The FCC also noted that it expanded existing MOUs in Michigan and West Virginia with robocall investigations. According to the press release, the MOUs help facilitate relationships with other actors, including other federal agencies and robocall blocking companies, and provide support for and expertise with critical investigative tools, including subpoenas and confidential response letters from suspected robocallers. The FCC also noted that “during investigations, both the FCC’s Enforcement Bureau and state investigators seek records, talk to witnesses, interview targets, examine consumer complaints, and take other critical steps to build a record against possible bad actors,” which “can provide critical resources for building cases and preventing duplicative efforts in protecting consumers and businesses nationwide.” |
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Although sweepstakes are a time-honored, highly effective means to promote a company, product or service, anyone who has conducted one can attest to the many legal, technical and operational difficulties they can entail. In a few rare instances, sweepstakes that are poorly conceived or improperly conducted can lead to disastrous consequences, a fact which a company called Artesian Builds recently learned the hard way.
Artesian Builds assembled customized computers and related products for gamers and streamers on platforms such as YouTube and Twitch, and like many companies operating in that space it employed gamers as “brand ambassadors” to help promote its products, offering them opportunities to earn credits toward future purchases and chances to win computers during monthly sweepstakes. On March 1, 2022, Artesian held a live-streamed event to select the winner of its most recent monthly sweepstakes, during which CEO Noah Katz apparently elected to arbitrarily change the rules governing winner selection. After randomly choosing a winning entry, Katz publicly discarded it because, according to him, the selected winner did not have a sufficient number of social media followers. During the same live-streamed event, Katz then went on to disqualify other randomly-selected winners for being “too small.” Unsurprisingly, this did not sit well with the entrants watching the live-streamed event, several of whom expressed their ire on Twitter. These tweets and related social media posts garnered considerable attention in the gaming community, quickly resulting in a cascade of outrage and furious anger that eventually drew the attention of Intel, the sweepstakes sponsor, which issued the following tweet: “We strive towards welcoming streamers of all sizes to our programs and do not agree with recent negative comments directed toward small streamers.” One week after this debacle, Artesian Builds abruptly announced it was “freezing/suspending all activities.” While the company did not expressly state that it was closing its doors due to the prior week’s sweepstakes snafu, it is hard to believe that it didn’t factor into the decision in some manner. This incident demonstrates the vital importance of having clear, written rules governing all aspects of a sweepstakes, and how critical it is to abide by them. And, even if your sweepstakes rules include a provision allowing you to change them as you see fit, changing an element as important as the criteria for winning a prize after a promotion has launched is a never a good idea, and doing so during a live-streamed event being watched by hundreds of rabid gamers is an even worse one. |
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In October 2021, the Federal Trade Commission warned more than 700 businesses that they could incur significant civil penalties (up to $46,517 for each violation) if they use reviews or other endorsements in an unlawful manner.
As proof of its intent to actively enforce truthful review and endorsement practices, on January 25, 2022 the FTC announced a $4.2 million settlement with Fashion Nova LLC to settle an enforcement action concerning allegations that the company routinely suppressed negative product reviews from being posted on its website.
According to the FTC complaint, Fashion Nova used a third-party online product review management interface to automatically post four- and five-star reviews to its website, while lower-starred reviews were withheld for the company’s approval. The FTC also alleges that from late 2015 until November 2019, Fashion Nova never approved or posted any of the hundreds of thousands of negative product reviews submitted by consumers. In addition to the monetary penalty, Fashion Nova is also prohibited from any further attempt to suppress negative customer reviews.
The FTC also announced that it is sending letters to 10 more companies offering review management services to place them on notice that avoiding the collection or publication of negative reviews violates the FTC Act.
The FTC has released new guidance for online retailers and review platforms regarding the agency’s key principles for collecting and publishing customer reviews in ways that do not mislead customers. “Deceptive review practices cheat consumers, undercut honest business, and pollute online commerce,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
The message is clear: The collection and promotion of online reviews and endorsements must be transparent and reliable. Companies that rely on customer reviews to promote their products or services should review their practices to ensure compliance with current FTC guidelines.
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