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CFPB: Certain Digital Marketers Are Subject To UDAAP

Recently the CFPB released an interpretative rule providing that certain digital marketers may be considered “service providers” under the Consumer Financial Protection Act (“CFPA”) and thus subject to the CFPA’s prohibition on unfair, deceptive or abusive acts or practices (“UDAAP”). The CFPA is applicable to service providers who provide a material service to “covered persons” under the CFPA.

In the interpretative rule, the CFPB determined that digital marketers engage in a material service when they assist in developing content strategies through identifying and selecting prospective customers or assisting in selecting or placing content to influence customer engagement. The CFPB also noted that digital marketers also may provide a material service when they identify customers and attempt to acquire those customers because it is a significant component of offering a consumer financial product.

Digital marketers may be excluded from the definition of a service provider under CFPA’s time or space exception. Read More