Kelley Drye & Warren LLP’s Post

Just an FYI (by Lauren Aronson) Did Lurn Fail to Learn from the FTC’s Notices of Penalty Offenses?   On October 26, 2021, online business coaching company Lurn, Inc. was one of more than 1,100 companies that received Notices of Penalty Offenses from the Federal Trade Commission concerning Money-Making Opportunities and Testimonials. These letters warned the recipients that if their representatives make claims and/or use testimonials about money-making opportunities that do not comply with prior FTC administrative cases, they could face significant civil penalties. Nearly two years later, the FTC announced that it had settled a case with Lurn, its owner, and two spokespeople for Lurn programs for allegedly making unsubstantiated claims that consumers could make significant amounts of money with online businesses. As part of the proposed order, Lurn and its owner have to pay $2.5 million in consumer refunds and notify consumers that purchased a course of the FTC’s enforcement action. According to the Complaint, consumers allegedly paid more than $65 million for Lurn’s e-commerce programs and related products and services, which were marketed online, through e-mail, and through social media, YouTube and telemarketing. While the Defendants claimed that the programs were tested and consumers could easily make thousands or even millions of dollars, the FTC alleged that the Defendants did not track earnings—their only substantiation was anecdotal testimonials from former Lurn coaches. These actions allegedly violated Section 5 of the FTC Act and the Telemarketing Sales Rule (TSR). The FTC’s press release positions this case as an example of how the FTC Notice of Penalty Offense Letters can give rise to potential civil penalty liability. However, the FTC notably paired its allegations of Section 5 violations with TSR violations. Anyone violating the TSR is already subject to steep civil penalties. Thus, the FTC did not have to test whether its strategy of sending Notices of Penalty Offenses to companies – whether or not they are currently violating the law – will hold up. It remains to be seen how the FTC’s strategy of leveraging its Penalty Offense Authority will fare if tested in court. For more information, please see the FTC press release linked below. And for more #consumerprotection content like this, follow the Consumer Protection Committee of the ABA Antitrust Law Section!

The Federal Trade Commission (FTC) has won a major victory against Intuit, the maker of TurboTax, for deceptive advertising. The FTC accused Intuit of misleading millions of taxpayers into paying for its tax preparation services, even though they were eligible for free filing. The FTC’s chief administrative law judge, D. Michael Chappell, ruled in favor of the FTC and issued an order that would require Intuit to clearly disclose the terms and conditions of any “free” offer. The order also specifies how Intuit should present its advertising on various platforms, such as websites, mobile apps, TV, radio, and social media. The order is not final yet, as it is subject to review by the full commission. Intuit plans to appeal the decision and take the matter to federal court if the FTC commissioners uphold the judge’s ruling. Intuit argues that the judge is biased and unfair, since he is an FTC employee and ruled in favor of the FTC in their own lawsuit. Intuit also claims that it already follows most of the FTC’s advertising practices and expects no significant impact on its business. However, this is not the first time Intuit has faced legal trouble for its TurboTax advertising. In a separate case, Intuit agreed to pay $141 million in restitution to customers who were deceived by its “free” offer. Intuit believes that the FTC’s decision is improper and questions the fairness of the process. However, many consumers and advocates applaud the FTC’s efforts to protect taxpayers from false and misleading advertising. #TurboTaxScam #FreeFileFraud #FTCFightsForTaxpayers #IntuitLies #TaxJustice https://lnkd.in/gdG27C_A

He can't handle the Truth... In his 13D filing on April 1st, for Truth Social, Donald Trump failed to disclose his multiple pending civil and criminal charges as well as the conviction of his company, the Trump org. for 17 felonies including tax fraud. Pending is also the civil trial of the 2 founders of Truth S, who are suing him. He countersued trying to nullify their shares. In addition, he refers to himself as "President" Trump throughout the filing of the document but is careful not to include the title of President in the line item #1 (Name of reporting persons). What is a 13D filing? A Schedule 13D filing with the U.S. Securities and Exchange Commission (SEC) is required when an investor or group of investors acquires 5% or more of a company's voting shares. The filing must be made within ten days of crossing the 5% ownership threshold. He now owns 78,750,000 shares. The purpose of the filing is to provide transparency to other investors regarding significant ownership positions in publicly traded companies. Actual filing. "Item 2. Identity and Background This Schedule 13D is filed by President Donald J. Trump (the “Reporting Person”). President Trump is an individual and citizen of the United States of America. The principal address of President Trump is 1100 S. Ocean Blvd. Palm Beach, FL 33480. During the last five years, the Reporting Person has not been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws." Donald Trump has asked the Supreme Court to decide whether or not he was above the law while in office. Until that decision is made, he may continue to circumvent them until he is forced to comply like every other citizen of the United States. Penalties for non-compliance with SEC regulations and disclosure requirements can vary depending on the severity and circumstances of the violation. These penalties may include: -Monetary fines imposed by the SEC. -Legal action or enforcement proceedings initiated by the SEC. -Injunctions or cease-and-desist orders prohibiting further violations. -Suspension or revocation of registration as a securities issuer or broker-dealer. -Criminal prosecution for willful violations of securities laws. -Civil lawsuits filed by investors seeking damages for violations of securities laws. -Damage to reputation and loss of investor trust. -Increased regulatory scrutiny and oversight. -Potential personal liability for officers, directors, or other responsible individuals. -Negative impact on the company's stock price and market value. Read the full 13D here. 👇 https://lnkd.in/enEs5JDW

BIG News you may have missed: You need opt-in consent to disclose information collected in confidential contexts: Federal Trade Commission tells tax preparation companies (but also the rest of us). This was part of a Notice of Penalty Offense and can subject an offender to penalties of up to $50,120 per violation. Express consent for different use: You need affirmative, express consent to: 🔹 Use information collected, whether online or offline, in a context where an individual reasonably expects that such information will remain confidential ("Confidential Context") for purposes not explicitly requested by the individual ("essential and necessary" for the original purpose per the "Beneficial" case below). For example: 🔹 Use such information to obtain a financial benefit that is separate from the benefit generated from providing the product or service requested by the individual 🔹 Use such information to advertise, sell, or promote products or services The decision is rooted in a 1975 case (Beneficial Corp) in which a company used tax information it obtained in its tax return preparation services to solicit customers for loans. There the secondary use was prohibited by law. Deceptive advertising: 🔹 You may not make false, misleading, or deceptive representations or to omit material facts concerning the use or confidentiality of such information. For example: It is an unfair or deceptive trade practice to misrepresent, explicitly or by implication, that an individual’s information will: 🔹 be used solely to provide the specific product or service requested by the individual and not for any unanticipated uses; and 🔹 not be used to obtain a financial benefit that is separate from the benefit generated from providing the product or service requested by the individual Also you may not: 🔹 Make such uses whether the information is disclosed to a third party or used internally to carry out the above-proscribed purposes 🔹 Use pixels, cookies, APIs, or SDKs to amass, analyze, infer, or transfer personal information in the ways outlined above Affirmative consent: 🔹 Affirmative express consent means a freely given, specific, informed, and unambiguous indication of an individual’s wishes via a separate agreement, which follows a clear and conspicuous disclosure of all relevant information necessary for the provision of consent. 🔹 This includes, at minimum: The name of the company; the name of the individuals; the specific purpose for which the consent is signed, the particular use that will be made of the information; the parties or entities to whom the information will be made available; the date on which the consent was signed; a statement that the relevant information will not be used for any purpose other than stated in the consent and a statement by the individual that they consent to the use of such information such purpose. #dataprivacy #dataprotection #privacyFOMO https://lnkd.in/dR83bx7n

🧐 Before deciding to disclaim a gift, it's essential to weigh numerous factors. Without accurate information and the necessary resources, unexpected complications can arise. 🤩 But rest easy and check out our latest blog post where we explore disclaimers and voided gifts, what it means, what to consider, and how professional fiduciaries can make sure the process goes as smoothly as possible for clients through legal software! #Disclaimers #VoidedGifts #EstateAdministraion #TrustandWills

You probably use several legal technology products every day. Maybe you love some, maybe you despise others. Why not share your experiences so that other legal professionals can make better buying decisions? On the LawNext Legal Technology Directory, there are actually two different ways you can contribute reviews. And one way even earns you gift cards! Follow the link to learn more.

On June 24, 2024, California Attorney General Rob Bonta, along with 22 other attorneys general, filed an amicus brief supporting the Federal Trade Commission’s (FTC) cease-and-desist order against Intuit, the maker of TurboTax. The FTC found that Intuit deceptively advertised “free” tax-filing products, which were not actually free for most users. Key Points: - Deceptive Advertising: The FTC’s investigation revealed that Intuit misled consumers by advertising TurboTax as free, while most users had to pay after investing time and sharing personal information. - State and Federal Collaboration: The amicus brief argues that the FTC’s order is lawful, supported by evidence, and complements the 2022 multistate settlement where Intuit agreed to pay $141 million for similar deceptive practices. - California’s Commitment: Attorney General Bonta emphasized the importance of state and federal cooperation in protecting consumers from deceptive business practices. The 2022 settlement included $11.4 million in restitution for approximately 370,000 Californians who were deceived by TurboTax. - IRS Free File and Direct File: The IRS offers free tax-filing options through the IRS Free File Program and the newly permanent Direct File program, which saved taxpayers an estimated $5.6 million in filing costs during the 2024 season. Stay updated with Global Regulatory Insights for the latest updates on regulatory changes and their implications #ConsumerProtection #FTC #TurboTax #DeceptiveAdvertising #GRI

Hey Dealers, GMs, CFOs, COOs, OEMs and Automotive Managers responsible for protecting the consumer data you are sharing with your 3rd party software vendors and complying with the 104 Laws, Acts and Rules dealerships are subject to... "The FTC is using its Penalty Offense Authority to put five tax preparation companies on notice that they could face civil penalties if they misuse consumers’ confidential data. Not in the tax prep business? Not so fast. The Notice of Penalty Offenses Concerning Misuse of Information Collected in Confidential Contexts restates long-standing legal principles every business should keep in mind." Let me know if I can help with your good faith cybersecurity compliance effort or act as your "Qualified Individual" as you assess your cybersecurity posture vis a vis FTC Safeguards and the growing threat from 3rd party Consumer Data Sharing Systems that may not have cybersecurity as their primary business driver. Stay safe out there! Jim James E. Lawrence, COO/Co-founder ADCO Certified Dealership Compliance Officer Author: "Qualified Individual Designation" Training e: Jim.Lawrence@SDPCompliance.com p: 503-318-3621 w: www.sdpcompliance.com #Cybersecurity #Protection #Business #Passwordprotection #dataprotection #security #datasecurity #defenceindepth #riskassessment #networksecurity #encryption #accesscontrols #employeeeducation #incidentresponse #businessprotection #informationsecurity #cyberthreats #malware #phishing #datatheft #dataprotection #bestpractices #cybercrime #cyberattack #cyberdefense #multilayeredsecurity #digitalsecurity #manufacturing #AI #digital #Itsupport #automotive #data #cyberattack #hackers #datasecurity #cyberrisks #cyberinsurance #dealership #protection #automotiveretail #consumerprotection #security #compliance #training #privacy #hacking

FTC Judge Decides Intuit's 'Free' TurboTax Ads Did Mislead Consumers: The FTC's chief administrative law judge (ALJ) ruled that Intuit, the parent company of TurboTax, "deceived consumers" and "engaged in deceptive advertising" by advertising its "Free Edition" tax filing service as free when users ultimately had to pay. The Verge reports: The ruling (PDF) includes several pages of commercials and online ads where Intuit advertised its "Free Edition" software. While the name implies that the service is, well, free, people wound up having to pay to use it -- sparking a lawsuit from the FTC and a $141 million payout to affected users. Meanwhile, Intuit's actually no-cost Free File version, which it launched in partnership with the IRS, remained exceedingly difficult to find. In 2021, Intuit exited the program after the IRS stopped letting companies hide their free filing services from search engines. The FTC's ALJ determined that there is a "cognizant danger of a recurring violation" by Intuit and issued a cease-and-desist order that prohibits the company from "engaging in deceptive practices in the future." The ruling prevents Intuit from representing a product as free unless it actually is free for everyone to use and "clearly and conspicuously discloses any terms that would limit the offer." In a statement, Intuit called the FTC's investigation process "flawed and highly questionable," noting "Intuit already adheres to most of the advertising practices in the FTC's erroneous decision." The company adds that it has "been clear, fair, and transparent" with customers and remains "committed to free tax preparation." Read more of this story at Slashdot.

FTC Judge Decides Intuit's 'Free' TurboTax Ads Did Mislead Consumers: The FTC's chief administrative law judge (ALJ) ruled that Intuit, the parent company of TurboTax, "deceived consumers" and "engaged in deceptive advertising" by advertising its "Free Edition" tax filing service as free when users ultimately had to pay. The Verge reports: The ruling (PDF) includes several pages of commercials and online ads where Intuit advertised its "Free Edition" software. While the name implies that the service is, well, free, people wound up having to pay to use it -- sparking a lawsuit from the FTC and a $141 million payout to affected users. Meanwhile, Intuit's actually no-cost Free File version, which it launched in partnership with the IRS, remained exceedingly difficult to find. In 2021, Intuit exited the program after the IRS stopped letting companies hide their free filing services from search engines. The FTC's ALJ determined that there is a "cognizant danger of a recurring violation" by Intuit and issued a cease-and-desist order that prohibits the company from "engaging in deceptive practices in the future." The ruling prevents Intuit from representing a product as free unless it actually is free for everyone to use and "clearly and conspicuously discloses any terms that would limit the offer." In a statement, Intuit called the FTC's investigation process "flawed and highly questionable," noting "Intuit already adheres to most of the advertising practices in the FTC's erroneous decision." The company adds that it has "been clear, fair, and transparent" with customers and remains "committed to free tax preparation." Read more of this story at Slashdot.