FTC Action For Quicken Loans “No Registration, No Login” Claims?
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The National Advertising Division (“NAD”) of the
Better Business Bureau (“BBB”) has referred Quicken
Loans, LLC (“Quicken Loans”) to the Federal Trade
Commission (“FTC”) for investigation into its
“No Registration, No Login” advertising practices. The
NAD found that the statement “No Registration, No Login”
misrepresented to consumers that Quicken Loans would not be
collecting or sharing their personal data with third parties. In
reality, the NAD believes that Quicken Loans requires consumers to
enter a significant amount of personal information in order to
learn more about its mortgage refinancing services. Additionally,
it shares and collects consumer personal data with third parties.
Quicken Loans did not participate in the self-regulatory process
offered by the NAD and now faces the specter of a potential FTC
How are advertising practices regulated?
The BBB is an independent non-profit organization that, among
other things, offers a self-regulation dispute resolution process,
which is almost always a faster and cheaper alternative to court
proceedings for participating parties. The NAD is the self-regulatory body of the
BBB that monitors and evaluates national advertising issues and
related disputes. The NAD examines and rules on a wide range of
advertising claims brought by consumers, companies and other
non-governmental agencies, including those involving puffery,
consumer surveys, product testing and false advertising. Should an advertiser refuse
to participate in their non-judicial process, the NAD will
frequently refer the matter to the appropriate regulatory agency,
which, in this case, is the FTC. United States advertising
practices are regulated by and through various state and federal
laws. The most prominent of the federal laws that address false
advertising is the Federal Trade Commission Act (“FTC
Act”). Nearly every state of the Union has regulations that
prohibit false advertising, which are generally enforced by state
attorneys general. Some jurisdictions, such as Ohio, allow private
citizens to bring false advertising lawsuits on their own..
Avoiding an FTC Action
Unfair and deceptive advertising is prohibited by Sections 5(a)
and 12 of the FTC Act. The FTC explains that “when consumers
see or hear an advertisement, whether it’s on the Internet,
radio or television, or anywhere else, federal law says that ad
must be truthful, not misleading, and, when appropriate, backed by
scientific evident.” If an FTC action is initiated, the FTC
may seek a federal district court order to: 1) enjoin (stop) the
advertising; 2) freeze assets; and/or 3) compensate victims.
The case at hand involves advertising which the NAD found
misleads consumers into reasonably believing that their personal
data will not be collected or shared with third parties. What
companies do with consumer data has become a hot topic of late with
state legislation, such as the California Consumer Privacy
Act (“CCPA”), and the European Union’s
General Data Protection Regulation (“GDPR”), both of
which afford consumers significant personal data rights.
We will continue to monitor the Quicken Loans matter and provide
an update if any FTC action is initiated. In the interim, it is
important to remind our readership that consulting with competent
advertising and marketing counsel will help prevent against
becoming the subject of an FTC investigation.
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