CFPB: Digital marketers not exempt from Consumer Financial Protection Act

Digital marketers that provide targeted advertising for financial firms are subject to the Consumer Financial Protection Act and its prohibition on unfair, deceptive or abusive practices. Therefore, these marketers risk potential legal action if they run afoul of the act, according to an interpretive rule issued today by the Consumer Financial Protection Bureau.

Marketers are currently exempt from CFPA regulation if they provide banks and other financial institutions “time and space” in traditional media outlets—such as television and newspapers—to advertise their products. In a statement, CFPB said today’s digital marketers go far beyond that approach by collecting large amounts of information about consumers and using that data to shape marketing content strategy. Given the fundamentally different nature of the services provided, behavioral marketing and advertising for financial institutions could subject marketers to legal liability, depending on how those practices are designed and implemented, according to the agency.

“The CFPB, states, and other consumer protection enforcers can sue digital marketers to stop violations of consumer financial protection law: Service providers are liable for unfair, deceptive, or abusive acts or practices under the Consumer Financial Protection Act. When digital marketers act as service providers, they are liable for consumer protection law violations,” the agency said.