Is Your Marketing Campaign Going to Get You Sued?

Before launching your next marketing campaign, keep in mind that federal regulatory agencies are cracking down on any and all activities that could be ruled as misleading or deceptive. Agencies like the FTC, FCC and the CFPB (Consumer Financial Protection Bureau) have significantly increased their scrutiny of marketing practices across virtually every industry — from healthcare and technology to retail and manufacturing — and are imposing steep penalties for companies whose campaigns are found to be in violation. Marketing compliance mistakes is no laughing matter. The CFPB recently reported that noncompliant marketing practices yielded $19.4 million in remediation in the last six months of 2014 alone. Just recently, the FTC ruled that Ashworth College deceptively marketed its online college degree and career-training programs, which included an $11 million judgment. The CFPB recently filed a complaint against PayPal for illegally signing up consumers for its online credit product, seeking $15 million in consumer redress and $10 million in penalties. And it’s not just the “big guys” the regulators go after. The Federal Trade Commission recently approved final consent orders involving two auto dealers in Alabama and California that deceptively advertised the sale, financing and leasing of their vehicles. Many times, companies violate regulations without even realizing it. For example, poor training at a contact center may cause an agent to say something “off script” to keep the conversation going that inadvertently crosses a compliance line. Or a third-party affiliated with your campaign may claim something about your product or service that doesn’t follow your approved message track. These seemingly innocent missteps can quickly transform into illegal and costly violations. Here are some tips to help safeguard your campaigns from unnecessary lawsuits: Stay informed about existing and new regulations: It is important to stay on top of the regulatory compliance regulations, how they are being enforced and how they could impact your brand. The federal regulators are constantly updating their websites with new bulletins and press releases. Law firms that specialize in advertising and that have regulatory practice groups are often blogging and posting about rulings in this area. Regulatory enforcements are making headlines on a regular basis. Reading and digesting these types of information will go a long way in helping you mitigate your risk. If you cannot invest the time yourself, look for a partner with expertise in implementing a compliance monitoring campaign based on federal regulations and the rules and brand guidelines that are important to your company. Track the volume of marketing messages: It is equally important to know exactly what is being communicated about your brand across the broad mix of marketing channels. This can be a daunting task to accomplish. Start by having a comprehensive Compliance Management System (CMS) in place. This will allow you to quickly survey and audit all channels of customer engagement and acquisition. This system should include monitoring capabilities, a clear procedure for violation remediation, and technology that flags the potential violations with enough time for companies to make modifications and document their actions. The benefit of catching a potential problem early far outweighs the cost of the technology required for seamless monitoring. Put a compliance team in place: Partner your CMS with a dedicated compliance team to take the burden off of your sales and marketing staff. This will help avoid any blurred lines between sales and marketing and compliance teams. Having a Chief Compliance Officer who reports to the CEO or Board of Directors will add another layer of protection for your company. Make your marketing guidelines clear and enforceable: It is critical to have strict marketing guidelines in place and ensure that anyone communicating your marketing messages knows what they can and cannot communicate. Make it clear what will happen if employees or affiliates don’t follow the rules so that they remain vigilant about what and how they are communicating. Hold the messengers accountable for their actions. Keep an ear fine-tuned to customer complaints: Do not dismiss complaints from consumers, as these complaints usually lead regulators to investigate any potentially misleading or deceptive practices. Have a system in place to track complaints and a plan for responding and remediating issues as they arise. Regulatory pressure in marketing is only expected to continue. Making sure that your company has the proper knowledge of the regulatory climate and how this may impact your reputation and brand is critical. Thus, an investment in compliance is no longer optional. It is an integral part of protecting your company from coming under the watchful eye of federal regulators and a solid defense against potential lawsuits.

Performance Marketing

Is Your Marketing Campaign Going to Get You Sued?

Alex Baydin

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Alex Baydin