We have talked a lot this year about the Federal Trade Commission’s (FTC) focus on reviews, and so far we have seen cases involving review suppression and incentivized reviews, as well as new guidance about how platforms and marketers should handle reviews. And the Consumer Financial Protection Bureau (CFPB) has now staked its claim to this issue, asserting that there is yet another review sheriff in town – this time, one focused on financial products and services.
The CFPB recently released a policy guidance statement on review fraud and gag clauses. For those new to this area, gag clauses are provisions in consumer contracts that prohibit consumers from providing truthful online reviews. These provisions were largely deemed unlawful by Congress in the 2016 Consumer Review Fairness Act (CRFA). The FTC, however, is the agency that Congress gave enforcement authority to over the CRFA.
So what should we expect from the CFPB in this area? Well, the statement made it quite clear that for entities the CFPB regulates, it will be looking closely at how reviews are handled and making sure that consumer-facing contracts do not prevent consumers from posting reviews of banking-related products and services. And yes, the agency is threatening law enforcement.
The CFPB policy statement starts by discussing some of the existing research, which generally supports the proposition that reviews are an important consideration for consumers, particularly when making online purchases. Although the research hasn’t focused on the financial products and services that are the focus of the CFPB, the statement nevertheless asserts that reviews will continue to play an important role in the marketplace. The statement also discusses in depth the important public policies reflected in the CRFA and explains the types of behavior that it believes would lead to violations of the statutes that the CFPB does actually enforce. This would include efforts to encourage consumers to remove reviews they had posted or contractual provisions restricting the posting of reviews.
And the statement makes it quite clear that the CFPB is looking closely at FTC cases in this area, discussing cases such as a 2015 FTC case against Roca Labs, where the agency invoked its general unfairness authority to challenge restrictions on truthful consumer reviews, and more recent cases involving allegations of suppression of negative reviews. So what should we make of this? Well, as you all probably know, CFPB Director Rohit Chopra was until fairly recently an FTC commissioner, and FTC Chair Lina Khan briefly worked in his office during that time. So, whether you are looking at FTC issues or CFPB issues, it is probably safe to assume that there is a good deal of interaction between the two agencies, and theories that develop at one will likely gain traction at the other. And of course, keep in mind that whereas the FTC is an independent agency that usually has five commissioners at the helm (but currently has only four), the CFPB is quite different. The CFPB has a single director, so the head of that agency does not have to handle or address divergent views of other commissioners.
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