On August 10, 2022, the CFPB issued an interpretive rule laying out when digital marketing providers for financial firms must comply with federal consumer financial protection law. According to the CFPB, digital marketers acting as service providers can be held liable for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations.
Unlike traditional marketing which relies on getting a product or service out to as wide an audience as possible, digital marketers utilize personal data and behavioral analytics models to target individuals or groups that are more likely to interact with an ad or sign up for a product or service. The CFPB’s interpretive rule titled Limited Applicability of Consumer Financial Protection Act’s “Time or Space” Exception to Digital Marketers clarifies that:
Digital marketing is covered by the Consumer Financial Protection Act as service providers.
Companies that solely provide time or space for an advertisement for a consumer financial product or service through print, newspaper, or electronic media as exempted.
Digital marketers that provide material services to financial firms, meaning they are involved in the development of content strategy such as identifying or selecting prospective customers and selecting or placing content in order to encourage consumer engagement with advertising, do not qualify under the “time or space” exception.
The CFPB, states, and other consumer protection enforcers can sue digital marketers to stop violations of consumer financial protection law.
Read the CFPB’s full release here.
The interpretive rule can be found here.