• Marketing misled consumers that the app had safety and security similar to banks, when the app did not have consistent fraud detection practices.
• Ads misrepresented FDIC insurance coverage of balances. 
• The app did not provide inbound phone support, despite being aware that this “created opportunities for fraud” through fake phone numbers. 
• A promotion encouraging users to post their username publicly generated account takeover fraud. 
• Responses to fraud were inadequate and inconsistent with the statements made on the website regarding support and protections. 
• Despite promises of quick cash access, frequent account freezes with limited customer support left consumers without the means to pay for necessities.

This is not the first time states have alleged that payment transfer services violated UDAP laws through their marketing of safety or security, or permitting fraud on the platform. For example, last year AG James sued the parent company of Zelle on a similar theory, and Texas previously settled with PayPal regarding the Venmo app’s practices.   

The Agreed Final Judgment requires Block to:

• Comply with the federal EFTA Regulation E, including by conducting investigations of notices of error and providing any provisional credits required by the regulation, without requiring the customer to take certain additional steps such as filing a police report. 
• Create a governance process for compliance including a committee reporting to the board.
• Prohibit misrepresentations regarding customer service, fraud protections, and banking (including where applicable making specific disclosures that the app is not a bank). 
• Provide education to consumers about common fraud on the platform, and create procedures designed to reduce fraud.
• Implement procedures to respond to account takeovers and establish procedures pertaining to account suspensions and deactivations.
• Appropriately staff customer service to resolve customer complaints, including live 24-hour support with “human” support available during specified hours. 
• Comply with the CFPB’s prior 2025 settlement pertaining to Block’s conduct in providing customer redress, and make a $45 million payment to the states.  

Key takeaways for all companies: 

• Make sure your customer support practices and staffing aligns with marketing promises.
• If you become aware of customer complaints regarding an issue, don’t ignore them. This could become a basis for a “failure to disclose” allegation for a known issue. 
• Don’t assume that once a federal enforcement agency acts, state AGs will back down. They may take the action into account but continue with their own independent authority and avenues for relief. 
• This settlement serves as another example that despite political differences, states are still working together on key consumer protection initiatives.

Mammoth compared the price of a Harry’s Original 8-count refill ($17) and a Harry’s Plus 8-count refill ($25) to a Gillette Fusion5 ProGlide 8-count refill ($39). Mammoth told consumers that Gillette was “straight up taking advantage of you” for “a couple pieces of metal and some plastic” and urged them to “stop getting ripped off by your razor company.”

Gillette took issue with the prices Mammoth quoted, noting that consumers could receive a one-time discount from Gillette other retailers. NAD noted that “price comparisons should reflect prices that are charged on a regular basis and for a reasonably substantial period of time.” Isolated sales prices shouldn’t be used. Accordingly, NAD found that Mammoth’s numbers were appropriate.

Gillette also objected to the suggestion that it was taking advantage of customers and ripping them off. Although NAD has often taken a strong position on disparaging claims, here NAD noted that “disparagement alone does not warrant discontinuance of a claim that is not false or misleading.” Although the language in the ads was “somewhat hyperbolic,” NAD didn’t seem to be too bothered by it. 

This decision provides helpful guidance to advertisers looking to make price comparisons. It’s important to ensure you focus on the regular prices at which products—both yours and your competitor’s—are sold for a reasonably substantial period of time. And while aggressive language can draw scrutiny, truthful claims supported by fair comparisons won’t automatically be shut down just because they’re sharp.

From Kitchen Tables to Market Structures: Examining the fundamental economics behind rising costs for families and the American dream

This panel, moderated by Rebecca Borné, Assistant Attorney General, Connecticut Attorney General’s Office was intended as a backdrop for understanding the economics of rising costs. It included an industry representative and an academic participant to discuss prices. The industry representative, general counsel for a large beef processor, explained beef pricing trends and the economic factors driving them. Ryan Nunn, Director of Research at the Budget Lab at Yale University, described short-run and long-run drivers of pricing. In the short run, he noted prices have increased from: 

• Higher energy prices due to the Iran conflict
• Higher energy costs due to AI investment (but unclear)
• Tariffs
• Financing costs from higher interest rates

In the long run, prices increased from: 

• Higher housing costs from land use restrictions and stagnant housing construction
• Higher consumer borrowing costs from rising federal debt
• Insufficiently competitive product and labor markets, and asymmetric information

Looking back further, Nunn pointed to a series of economic shocks responsible for inflation, including supply chain disruptions from Covid and the Russian invasion of Ukraine. 

Market Consolidation and America’s Pocketbook: Housing, Eggs, Broadcast Media & More

Nicole Demers, Deputy Attorney General, Connecticut Attorney General Office kicked off the panel which also included Elizabeth Odette, Assistant Attorney General, Minnesota Attorney General (and Antitrust Task Force Chair) and Christopher Teters, Assistant Attorney General, Kansas Attorney General’s Office, with a representative from the American Economic Liberties Project (AELP). 

Demers stated that when markets consolidate, consumers feel the effects including in the areas of housing, groceries, healthcare, and media. AELP posited that concentration is caused by labor exploitation and other “economic termites” such as company uniform rental markets, where bloating causes higher prices. Odette said state AGs are in a unique position to hear from consumers, and state resources have increased in several states including through the creation of additional positions, increased fines, merger notification laws, and laws keeping antitrust actions from being pulled into MDLs. Teters explained the multistate approach is especially important for states like Kansas, as it allows them to put time and effort into big cases and “help swing way above their weight class” to impact consumers. 

The panelists discussed several types of consolidation, including in the areas of housing, groceries, and media. Centralized pricing software or algorithmic pricing may exacerbate the issue of housing prices. Panelists admitted that in some cases conduct that looks illegal may not be. Teters pointed to how difficult it is to investigate and convince judges or juries of illegal conduct. He also noted how general issues with drought or the economy, and a state of crisis, breeds opportunity for anticompetitive conduct and obfuscates potential issues. AELP’s panelist claimed that in agriculture, there is a problem with the floor prices going up even after a crisis, such as with eggs, beef, Pepsi, payment companies, and fertilizer. Odette mentioned recent enforcement in Agristats, John Deere, and pesticide loyalty programs and said states are looking at a Restaurant Depot merger. Demers asked how consolidation impacts media, not just with prices and labor but also with the marketplace of ideas and information. Odette said local journalists used to report on local businesses, and consolidation could lead to a decrease in quality of news. AELP said consolidation including Google Adtech and other media companies is eroding the ability to know what is going on in society, and thinks AGs should not overlook vertical integration. He said you can point at anything and find an issue. 

Current Consumer Trends in Data-Driven Pricing

Utah Attorney General Derek Brown moderated this panel, the next in a series of similar recent panels, joined by panelists from Instacart, the National Grocers Association, and Stevie DeGroff, First Assistant Attorney General at the Colorado Attorney General’s office. 

Defining Pricing Terms

AG Brown commented that the pricing landscape shifts every couple of weeks. He understood the use of dynamic pricing, such as price changes due to war, as with individualized pricing for auto insurance. But other instances of individual pricing sparked questions. DeGroff defined the terms surveillance, personalized, dynamic, and algorithmic pricing. The term “loyalty programs” has come up with regulations many states are considering, but is not easily defined. Colorado dealt with defining bona fide loyalty programs with its existing privacy law and related regulations, summarized as a program established for genuine purchase to provide defined benefit to a consumer voluntarily participating. DeGroff said when thinking of the contours of surveillance pricing, it is important to consider whether the consumer is getting a benefit versus harm. 

Potential Pricing Harms

DeGroff outlined two main buckets of harms:

1. Data Abuse. DeGroff explained abuse could be tied to surveillance pricing because businesses collect so much data to personalize. She said an increasing amount of data is being collected seemingly unrelated to the goods and services – for example, categorizing consumers by intellectual ability, or collecting biometric data. Concerns originating with targeted advertising are now playing out with surveillance pricing where secondary uses are not disclosed to consumers. Further, data becomes the target of breaches. This all causes a lack of trust from consumers. 
2. Pricing Risks. DeGroff described headlines about airlines using search history to set a higher price, using customer desperation, or personal data including sensitive or demographic data, to set a higher price. Businesses could also target discounts, with some getting more than others. Who gets the discount and why?

Enforcement Tools

AG Brown summed it up as pricing is not just what the market will bear, but what will the consumer bear. While surveillance pricing is “creepy”, he acknowledged there are some misconceptions and discussed those with the industry participants. For example, when data is being individualized, in practice panelists said it is being used to help consumers find what they want or help target coupons or promotions that benefit both consumers and small businesses. 

AG Brown asked how to provide disclosure and transparency without suppressing innovation. DeGroff said Colorado’s bill took this question into consideration, and she expects the vetoed bill to reemerge next year. She also pointed out current laws that can address pricing issues, such as consumer privacy laws addressing deleting data, opting out of the sale of data, and opt out of targeted advertising. States can also use unfairness – for example, if there is a fake discount or the discount is not equally applied. If using demographic data, businesses could run afoul of antidiscrimination laws. Finally, states also have laws addressing that the price on the shelf has to be the price at checkout. 

Disclosures and Innovation

DeGroff said it is useful to think of a ground truth for consumers, and what harm to prevent. More sensitive data could lead to more harms, and appropriate controls could be used for data. Should controls be for setting a higher price? Selectively giving discounts? Or set depending on the industry? Where might consumers have more expectation of fairness and ensuring no opportunity for misuse? AG Brown agreed that with discount programs there should be protections, but cautioned on “squishing” innovation including potentially coupons. DeGroff agreed but said a wholesale carve-out for loyalty programs could be harmful with potential misuse. 

AG Brown asked about disclosures like the New York law requirement. He questioned whether awareness is good enough – knowing someone is watching and collecting. Panelists responded that it is difficult to have meaningful disclosure, including issues with disclosure fatigue and potential for over disclosure to create antitrust concerns. DeGroff agreed antitrust is a great tool for the price setting world, but price tags are in the stores due to a moral imperative to charge customers the same price and treating customers fairly. 

DeGroff proposed rather than meaningful disclosure, control of data such as deletion rights might be more meaningful. Further, the role of data brokers may be different than if a brand or business a customer expects is getting data. She mentioned California’s upcoming data broker law that requires deletion of that data. She also suggested opting out of secondary use of data would be helpful. Finally, a true price, the same as what everyone is seeing, to start at the same place can mitigate potential harms.  She does not want customers to be siloed when it comes to pricing. 

Conclusion

Expect state AGs to continue to debate: 

• The right balance between free markets and consumer protection.
• The interplay between disclosure, innovation, consumer protection, and antitrust. 
• The appropriateness of tools such as antitrust laws, UDAP, privacy, and others to address alleged harms versus more specific regulation. 

The fact patterns in these letters are similar to ones we’ve seen before. The companies made various types of “Made in USA” claims—including claims in hashtags, like #madeinUSA—but the letters state that FTC staff has reviewed information which suggests the companies may be importing the products, in whole or significant part.

The letters go on to state that unless companies can adequately substantiate that “all or virtually all” of a product was made in the USA, their claims may violate the law and result in an enforcement action in which the FTC seeks redress for injured consumers and/or the imposition of civil penalties of up to $53,088 per violation.

Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, promised to “hold accountable any company that undermines Americans’ trust with misleading or outright false U.S. origin claims.” If you haven’t evaluated whether you can substantiate your “Made in the USA” claims recently, now may be a good time to do that.

Maine’s Consumer Protection Landscape

Unlike the forty-three states that elect their AG by popular vote, the Maine Attorney General is selected by its legislature every two years. The Consumer Protection Division in the AG’s Office operates under the Unfair Trade Practices Act (UTPA), which is modeled after the Federal Trade Commission (FTC) Act. Maine courts are guided by FTC and federal court interpretations of the FTC Act. 

Consumer complaints are a central driver of enforcement. The office receives regular reports on complaint trends, and scam activity consistently ranks among the top concerns, along with home improvement disputes. Maine pairs enforcement with a consumer mediation program, where staff and volunteer mediators help resolve disputes between consumers and businesses. 

From an enforcement standpoint, the UTPA provides pre-suit investigative authority, including through civil investigative demands, which are considered confidential. The law requires the office to provide 10 days’ notice before filing suit. The state is not subject to statutes of limitations under the common-law nullum tempus doctrine. The office prioritizes injunctive relief to stop harmful conduct, while also seeking restitution, disgorgement, and civil penalties of up to $10,000 per intentional violation. The office also participates in multistate investigations, allowing it to leverage resources, draw on expertise from AG offices in other states, and address conduct that extends beyond Maine’s borders.

Recent legislative developments related to consumer protection emphasize a focus on emerging risks, including:

• A cryptocurrency kiosk law imposing licensing, disclosure, and liability requirements to combat fraud
• New protections allowing financial institutions, under certain circumstances, to delay suspicious transactions involving older or vulnerable adults
• An opt-in privacy law for internet service providers, even in the absence of a broader, comprehensive privacy law

Ballot Power: Citizen Initiatives and Regulatory Change

Maine’s Constitution allows citizens to initiate legislation directly, making ballot initiatives a significant force in consumer protection law. After filing an initiative with the Secretary of State, proponents have 18 months to gather signatures equal to 10% of the last gubernatorial vote, or roughly 68,000 signatures currently.

Once qualified, the legislature may pass the proposal, reject it and send it to voters, or offer a competing measure. Even after passage, initiatives often require legislative refinement and may prompt litigation, underscoring the challenge of transposing complex policy into a yes-or-no ballot question.

Recent years have seen increased use of this process across issues from economic regulation to social policy, demonstrating its growing role in Maine’s regulatory environment.

For example, Maine’s automotive right-to-repair law, approved by voters in 2023 with overwhelming support, illustrates both the power and complexity of citizen initiatives. The law seeks to ensure that vehicle owners and independent repair shops have access to electronic vehicle data, including wireless telematics through either an interoperable platform or app.

Private Equity and Consumer Protection

Like other states, Maine is focusing on the intersection of private equity and consumer protection, where profit-driven investment strategies may be viewed as conflicting with consumer interests such as affordability, access, and quality.

Two areas have drawn particular attention for Maine:

• Healthcare transactions: Maine recently enacted a law requiring 180 days’ advance notice and regulatory review when private equity or similar entities seek to acquire or control healthcare providers. This indicates a broader concern about maintaining access to services in a state where hospitals are predominantly nonprofit. 
• Mobile home parks: Private equity acquisitions have prompted legislative responses, including:
  • Mobile home owners or their association have a first option to purchase the mobile home community in the event the owner sells the property  
  • Notice and mediation requirements for rent increases
  • Transfer fees on the purchase of a community by certain large purchasers, to fund programs supporting resident ownership

These measures demonstrate an effort to balance investment activity with consumer protection, particularly in markets affecting at-risk populations.

***

Maine’s consumer protection regime is unique in that it is not only shaped by the attorney general’s office and market forces, but also directly by voters. For businesses, this means staying attuned not only to enforcement trends but also to legislative developments driven by forces outside the traditional policymaking process. 

Summer Associate Bariela Capollari contributed to this post.

Sessions included The Deadly Deception of Counterfeit Drugs; Building Public-Private Partnerships to Protect Public Health and Safety; Mental Health Matters: Equipping Leaders to Make a Difference; Addressing the Rise of Illicit Substances and Related Criminal Markets; The Evolving Debate Over Prediction Platforms; Navigating a New Era in College Sports; and Financial Fraud in Focus.

We elaborate on some key sessions from the meeting below. 

Opening Remarks: AGA Chair AG Raúl Torrez

New Mexico Attorney General Raúl Torrez set the tone for the conference with a call for bipartisan collaboration and good faith debate. AG Torrez emphasized that regardless of party or state size, AGs are in the “get stuff done business,” and that collaborative policy statements and court actions are intended to shape national policy. He framed AGs as public servants who can model constructive governance for other institutions and urged continued coordination on issues ranging from algorithmic pricing to children’s online safety. AG Torrez was then joined by Jim Steyer, CEO of Common Sense Media, to discuss this year’s Chair’s Initiative on Protecting Children from Online Exploitation and Human Trafficking.

A New Pricing Playbook: Driving Innovation, Balancing Transparency, and Serving Consumers

Connecticut AG William Tong moderated a panel on modern pricing, featuring multiple industry representatives and the National Retail Federation (NRF).

AG Tong framed the issue from the consumer perspective: consumers expect a clearly stated price, no hidden fees, and the ability to comparison shop. According to AG Tong, the challenge arises as pricing increasingly involves algorithms, machine learning, and consumer behavioral data. Overall, AG Tong focused on:

• Putting customers on notice through disclosures, even if imperfect;
• Ensuring data-driven pricing actually advantages consumers; and
• Ensuring data does not distort supply and demand and that prices are not increased based on a consumers’ ability to pay or necessity.

Key points from the discussion included:

• A company representative noted that they are tracking 75 pricing-related bills; most have not advanced, but Connecticut passed a law and New York has a bill awaiting the governor’s signature. The representative emphasized that “algorithm” can mean a basic formula—like a chocolate chip cookie recipe—and that surveillance pricing raising concerns about race or health data is a fundamentally different question.

• NRF pushed back on the “surveillance pricing” framing as a “bogeyman,” stating there is no evidence its members are fluctuating prices real time in stores because doing so would erode customer trust. NRF noted Connecticut’s law takes a more balanced approach: disclosure is required only if a price is increased based on individual data, not decreased.

• NRF cautioned that mandatory disclosure of all pricing inputs could create a “black box” that confuses consumers and be collusive. An industry representative similarly warned that requiring companies to divulge how every price is derived could facilitate collusion and disadvantage smaller companies. AG Tong pushed back: “Who better to bear the risk—the retailer or the consumer?”

• Affordability, loss leaders, loyalty programs, and discounts were discussed as areas where data legitimately advantages consumers, and where overbroad regulation could chill competitive behavior.

For more information on pricing legislation, including surveillance pricing, see our webinars on the topics here and blog posts here.

The GC & The AG: Building Relationships Before the Crisis

Arkansas AG Tim Griffin moderated a conversation with general counsel from a grocery store chain and ride share app. The overall message was businesses that build relationships with AG offices before there is a problem are the ones that navigate enforcement most successfully.

Key points from the panel included: 

• The grocery store representative noted that AG offices are increasingly active on M&A, organized retail crime, surveillance pricing, and grocery affordability—and that companies must understand these priorities and engage early. They explained that their company proactively educated AG offices on grocery pricing economics (roughly 2% margins).

• The ride share company representative emphasized shared interests with AGs—clear rules, safe communities, information sharing—and highlighted partnerships on human trafficking (drivers recognizing signs), and relationship building through staff-level continuity.

• AG Griffin noted that “99% of engagement should be relationship building.” According to him, if you call a GC only when there’s a problem, you’ve already lost.

• Practical advice included that companies should engage at staff level (because staff outlast elected AGs), and finding organic partnership opportunities (ORC, human trafficking, drug takeback, gift card fraud, food pricing).

Data Privacy Enforcement: The Patchwork Is Real (But Not What You Think)

Moderated by Sharon Merriweather of the Maryland AG’s Office, this panel featured Delaware’s John Eakins and Andrew Kingman from Mariner Strategies and was one of the most substantive sessions of the conference for companies navigating state privacy compliance.

The panelists first overviewed the state of play for data privacy in the states, including that: 

• Vermont just signed the 23rd state comprehensive data privacy law. Twenty state laws are currently effective. Core definitions, consumer rights (access, delete, correct, opt out of sale/targeted advertising), sensitive data consent requirements, and the controller/processor framework are largely consistent—about 85% the same across the state laws.

• No state has a private right of action. AGs are the primary enforcers. Cure periods have expired. Bipartisan coalitions are actively enforcing.

• Delaware’s just-passed amendments (awaiting governor’s signature) include: explicit treatment of inferences as sensitive data even after collection, location data tied to sensitive locations (like abortion clinics) treated as sensitive, contracting and due diligence requirements for third-party disclosures, and a new impact assessment requirement for automated decision-making with discriminatory impacts.

The panelists then discussed enforcement trends and practical signals from the panel, including:

• States have moved beyond reviewing privacy notices to examining actual data use and senior leadership involvement. Mr. Eakins said, “We ask for board minutes. Make sure your bosses know—when the states are looking, they want to know what management is doing.”

• Multistate coordination is accelerating. A consortium of state privacy regulators plus the California Privacy Protection Agency (CPPA) has an MOU enabling information sharing. Delaware’s calendar is “80–90% multistate meetings.”

• States report 99% cooperation from investigation targets. Companies with mature programs—those that can quickly explain what data they collect, how they use it, and who makes decisions—fare significantly better.

• Expect settlements in both data security and privacy practices—under state privacy laws and UDAP statutes (including in states without comprehensive privacy laws).

• Kingman emphasized that businesses want consistency and clarity, value consumer trust, and appreciate AG guidance on unique state standards.

***

In all, the 2026 AGA Annual Meeting reinforced several themes that companies should keep in mind going forward: 

1. Multistate coordination is the norm, not the exception, and AGs are working together on privacy, pricing, AI, child safety, and financial fraud.

2. Companies that engage proactively—before enforcement—are the ones that navigate issues most successfully.

3. AI is simultaneously an enforcement target and an enforcement tool. AGs are using AI internally and regulating it externally.

4. Privacy enforcement is accelerating and board-level engagement with data practices is no longer optional according to state AGs.

5. The pricing debate is moving from theory to law. Companies using algorithmic pricing need a defensible story.

We will continue to monitor developments from the AGA and state AG enforcement trends. 

Narrow Duty with Broad Consequences

The Amazon settlement relates to Section 609(e) of the FCRA, 15 U.S.C. § 1681g(e), which requires a business that has potentially transacted with someone who fraudulently used a consumer’s identity to provide the identity-theft victim with the application and business transaction records of the fraudulent transaction. The statute permits a business to require proof of identity and proof of the identity-theft claim, and it allows a business to refuse the request only in narrowly defined circumstances.

According to the complaint, Amazon routinely declined to furnish identity-theft records, citing “security” or “privacy” grounds that the statute does not recognize as valid bases for refusal. The complaint alleges that consumers were forced to navigate a “Kafkaesque” loop to obtain records they were entitled to under Section 609(e): in some instances, customer service agents allegedly would not release records about a fraudulent account unless the victim could first name the identity thief—information available only in the very records being withheld. One victim reportedly guessed more than 30 names before giving up. The FTC also alleged that Amazon refused records to authorized law enforcement absent a subpoena and missed the FCRA’s 30-day deadline in numerous instances.

Compliance Lessons

What makes this settlement instructive is that Amazon’s alleged day-to-day practices, which included identity-verification scripts, escalation protocols, and well-intentioned “fraud prevention” efforts, did not meet the letter of the FCRA. Even after the FTC identified the issue to Amazon’s counsel in 2023, the FTC contends that the company did not implement a required written policy until 2025, after learning it was under investigation.

The parties’ resolution underscores the stakes. Amazon agreed to a $2.25 million civil penalty, detailed injunctive relief, multi-year website-notice requirements, affirmative outreach to “Eligible Identity Theft Victims,” and a decade of compliance reporting and recordkeeping. The order sunsets in 10 years.

Sophisticated Guidance Matters

The Amazon settlement illustrates that even well-intentioned compliance efforts can falter when they fail to account for the FCRA’s highly specific requirements. The statute imposes precise obligations, measured in days, triggered by specific requests, and subject to carefully delineated exceptions. These obligations intersect with other regulatory regimes, such as the Gramm-Leach-Bliley Act and state law.

Businesses that touch consumer data, payments, fraud response, or identity verification need experienced counsel who understand both the letter of the FCRA and how the Commission develops and resolves these cases.

Here’s an overview of some of the key allegations in the complaint:

• Undisclosed Paid Endorsements: The defendants paid influencers to post about the Polymarket platform without disclosing their material connection to the company. For example, the CMO reportedly used a personal PayPal account to send at least $350,000 to influencers between January 2025 and February 2026. The defendants also allegedly wrote posts for some influencers and sometimes asked them to promote specific bets.
• Fake Betting Videos on Simulated Platforms: The defendants paid influencers to produce videos showing themselves placing fake bets on a simulated version of the Polymarket platform. The videos created the impression that it was easy to make money on the platform. The defendants exerted substantial control over the videos, providing guidance on format and content, reviewing finished videos, and sometimes requiring reshoots. In some cases, the defendants reportedly prohibited influencers from disclosing they were being paid.
• “Clipping” Scheme to Make Ads Go Viral: The defendants employed a “clipping” scheme to make their influencer advertising go viral. For example, the defendants recruited individuals to create short clips from influencer content and disseminate them on social media using fake accounts, paying clippers $1 per 1,000 views. The defendants instructed clippers to make content “feel natural and native to the platform,” explicitly directing them: “Do NOT make the videos feel like ads or promotions.”
• Targeting College Students: The defendants aggressively targeted college-aged consumers through on-campus marketing. They collaborated with an agency to find college students who were paid $500–$2,000 per campaign to promote Polymarket to their peers. The defendants offered to pay fraternities directly for signing up users at $15 per user, offered $150 payments for access to chapter meetings to present about the platform, and provided branded merchandise and party sponsorships. 

NACA alleges that Polymarket’s conduct violates Washington, DC’s Consumer Protection Procedures Act. Among other things, it asks the court to award equitable relief, including equitable restitution, disgorgement of profits, and a permanent injunction against the defendants’ use of the practices described in the complaint. 

We only have one side of the story and it’s too early to tell how this case will turn out, but this case—like the lawsuit against Gymshark that we posted about earlier this month—demonstrates the importance of ensuring that influencer campaigns comply with the FTC’s Endorsement Guides. The FTC may have temporarily stepped away from the table, but plaintiffs’ lawyers and consumer groups are doubling down.

The plaintiff alleges that Abbott’s claims that the product is “Clinically Proven to Help Kids Grow” misled consumers into thinking the product was clinically proven to help typical children grow taller, when that’s not the case. Among other things, she pointed to a giraffe image accompanied by ruler-like marks on the label and to commercials showing parents lifting kids up so that they’re taller as support for her interpretation of the claim. 

Abbott argued that the phrase “Clinically Proven to Help Kids Grow” was not misleading because “grow” does not necessarily mean grow taller—instead, it could also refer to weight, body composition, or other forms of child growth. Abbott also argued that its disclaimer made clear that the studies supporting the claim involved children at risk for malnutrition or undernutrition, rather than all children generally.   

A New York federal court recently denied Abbott’s motion for summary judgment, holding that a jury could reasonably find that Abbott’s packages and ads communicated a message that the product could help typical children grow taller. The court also held that the disclaimer didn’t change the analysis, holding that a reasonable jury could find it ineffective because it isn’t prominent and the language doesn’t clearly explain how it limits the claim.

This case serves as a reminder that courts will generally look at the whole context of an ad (including images) to figure out what claims reasonable consumers are likely to take away from that ad. Ads can be literally true, but still misleading, if consumers take away a message that an advertiser can’t support. Even a disclaimer may not help, especially if that disclaimer appears in “small print” and is difficult to understand. 

We’ll keep reporting about these cases to help you Grow & Gain a better understanding of advertising law.

According to the FTC’s complaint, the enterprise continually launched new product offerings, registered new Delaware shell companies, and opened fresh merchant accounts to hide its true identity from consumers and evade fraud-monitoring programs.

The FTC’s allegations highlight three core tactics that serve as a textbook list of what not to do if you offer recurring subscriptions:

• Failure to Disclose Material Terms: The FTC alleges that the defendants advertised apps and services as free or available for a low, one-time cost, frequently touting a money-back guarantee. However, the companies buried information about automatic renewals and recurring charges in fine print.
• Unauthorized Billing: Beyond the undisclosed recurring fees, the complaint alleges that the companies double-charged consumers for the same product or added unauthorized add-on items to transactions without consumer knowledge or affirmative consent.
• Difficult Cancellation: The FTC alleges that the companies made it difficult to cancel. Many of their websites and apps allegedly omitted online cancellation mechanisms, forced consumers to navigate lengthy exit-interview questionnaires, or simply continued to charge credit cards even after confirming cancellation.

The FTC alleges these practices violate both Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act.

While this case involves an extreme example of an alleged multi-layered fraud scheme, the core tenets of the FTC’s enforcement strategy apply to all legitimate companies utilizing automatic renewals. Companies need to clearly and conspicuously disclose all material terms, get affirmative consent from consumers, and make cancellation simple.

We’ll continue to track these subscription cases. In the meantime, now is a good time to audit your signup flows, disclosure placement, and cancellation paths to ensure they match current legal requirements.

This week, the woman filed a class action lawsuit against Gymshark alleging that the company has enlisted “an army of fitness influencers” to promote its products and instructed them to post content “without disclosing to consumers that such posts are paid advertisements.” The complaint alleges that most of the soldiers in the influencer army didn’t disclose their connection to the company, and those that did used small print or text that viewers couldn’t see without clicking a link.

As with similar lawsuits, this complaint leans on the FTC’s Endorsement Guides to argue that it’s misleading for an influencer to promote a product without clearly disclosing her connection to the brand. (The complaint also points to this NAD case for the same principle.) The Florida woman alleges that she wouldn’t have purchased the leggings if it weren’t for the misleading posts and she seeks damages for herself and other people who purchased Gymshark products after seeing similar posts.

There are at least two lessons to learn here. First, if you are a consumer purchasing products based on an influencer’s recommendation, you may want to err on the side of assuming that the influencer is being paid. Second, if you are a company using influencers to promote your products, make sure your influencers disclose their connection to you in a way that complies with the FTC’s Endorsement Guides. If you don’t, you may find yourself doing some heavy lifting in court.

With the Antitrust Division's launch of its first-ever whistleblower rewards program, revisions to corporate self-disclosure policies, and a renewed emphasis on cooperation credit across all white-collar enforcement areas, companies that handle consumer data, make advertising claims, or engage in competitive marketing practices face heightened exposure. A complaint that begins as an advertising or privacy matter can quickly escalate into a federal investigation involving allegations of fraud, anticompetitive conduct, or obstruction — particularly where self-regulatory missteps compound underlying compliance failures.

Why This Matters for the Ad Law and Privacy Community

Advertising and privacy professionals are no strangers to multi-agency enforcement. The same conduct that draws an FTC inquiry can attract DOJ attention when it involves deceptive practices at scale, data-sharing arrangements with anticompetitive dimensions, or misleading claims that cross the line into criminal fraud. The DOJ's updated policies now create powerful new incentives for insiders to blow the whistle — and powerful new risks for companies that delay self-disclosure when problems surface.

For in-house counsel and compliance officers managing advertising review processes, privacy programs, or internal investigations triggered by consumer complaints, understanding how the DOJ evaluates corporate cooperation and exercises prosecutorial discretion is no longer optional — it's essential.

Join Us for a Webinar

Kelley Drye Partners Sean M. Farrell and Thomas F. Rybarczyk — both former senior federal prosecutors — will offer an inside look at how the DOJ evaluates corporate conduct and determines cooperation credit in a webinar titled "Inside the DOJ Playbook: New Guidance on Whistleblowers, Leniency, and Self-Disclosure." The discussion will be moderated by White Collar Partner Sandra L. Musumeci.

Sean served as Chief of the Antitrust Division's New York Office and helped shape its whistleblower and compliance programs. Tom served as Chief of the Public Corruption and Civil Rights Section in the U.S. Attorney's Office in Los Angeles, focused on prosecuting public corruption and fraud. Together, they will draw on firsthand experience to provide practical guidance for companies navigating internal investigations and high-stakes enforcement matters.

Topics will include:

• How the DOJ evaluates self-disclosure and corporate cooperation
• Practical implications of the Antitrust Division's whistleblower and leniency programs
• Strategies for navigating multi-agency and multi-jurisdictional investigations
• What current DOJ enforcement priorities mean for compliance programs and risk management

Who Should Attend

This program is designed for in-house counsel, chief compliance officers, litigation and regulatory practitioners, and anyone advising organizations on government investigations, enforcement risk, and corporate compliance — including those managing advertising and privacy compliance programs where enforcement risk increasingly intersects with DOJ priorities.

Register here.

The AGs also addressed personalized pricing (also referred to as “surveillance” pricing) and suggested that the use of consumer information to offer individualized pricing and offers (including promotions and discounts) may further complicate transparency and could create harms by, for example, generating higher prices at restaurants consumers visit more often. The AGs claimed that providing customers different discounts based on their personal data is no different than charging different base prices, since the end goal (i.e., increasing revenue) is the same. This could also lead to outcomes, the AGs said, where customers more dependent on delivery may be charged more based on their circumstances. The AGs further stated that customers “cannot meaningfully avoid personalized pricing that they don’t know about.” 

The AGs suggested that online food delivery services should be added to the existing Rule on Unfair and Deceptive Fees, with some additional inclusions:

• Clearly and conspicuously displaying the total price including fees at each stage of item selection;
• Accurately describing the purpose of each fee and how it is calculated, including who the fees go to; and
• Disclosing any markup or variation from in-store pricing for menu items and to separately itemize the total markups. 

The AGs further suggested that this Rule “may not be appropriate” for addressing personalized pricing, and instead recommended issuing a new rule on that issue for food delivery platforms. Such a rule, they suggested, should include clear and conspicuous disclosure of:

• The use of pricing technology to set personalized pricing based on individual data;
• Any specific price set using personalized pricing;
• Any variation in price between a fixed reference price (such as in-store or public), and
• The factors that result in price differentials.

Discounts and promotions, the AGs said, should specifically be included in such a rule and not exempted, and further disclosures are merited when personalized pricing is used as part of a loyalty program. Further, the platforms should be required to disclose the specific customer data used.

While these comments pertain specifically to online food platforms, AGs have voiced similar concerns with other industries (and in some cases, states have already enacted relevant laws). For example, earlier this year 27 state AGs submitted a comment letter pertaining to Rental Housing Fees. The AGs encouraged the FTC to continue its “efforts to address unfair and deceptive pricing practices across the economy.” The AGs continue to stress that any such rules that the FTC adopts should be a floor not a ceiling, allowing states to enact further protections. 

Businesses should continue to consider how they are disclosing their fees and the purpose for those fees. Further, they should consider reviewing how any “personalized pricing” is being disclosed to customers, including in the context of any loyalty programs. We anticipate further AG scrutiny in this space, and many of these topics will be discussed at the upcoming NAAG Presidential Summit. We will be in attendance and report on further developments. 

• What data practices are more likely to drive scrutiny when it comes to surveillance pricing concerns
• Common themes in pending federal and state legislation that warrant consideration
• Discussion of common use cases, and how to issue spot and address material risk with practical considerations
• Efforts to ban electronic shelf labels, and the tension with pricing transparency practices

Register here.

CLE
Kelley Drye is an accredited provider of CA, IL, NY, and TX CLE. This continuing legal education program has been approved for 1.0 New York non-transitional Professional Practice credit and 1.0 General credit for California, Illinois, and Texas. New York credit can be applied reciprocally to New Jersey requirements and Connecticut requirements. We will apply for CLE credit in other jurisdictions, upon request, but cannot guarantee approval.

The comment highlights how modern FTC orders can impose substantial and enduring compliance burdens that extend well beyond their remedial purpose. These obligations often require companies to maintain extensive internal governance structures, third-party audits, and detailed reporting systems long after they have demonstrated compliance. In addition, the comment observes that the FTC’s approach to order duration is increasingly out of step with other federal agencies, such as the Federal Communications Commission (FCC) and the Consumer Financial Protection Bureau (CFPB), which typically impose shorter, more tailored order terms. Lengthy orders also risk locking companies into outdated compliance frameworks that may hinder innovation in rapidly evolving areas. The comment further notes that consent orders may divert resources away from emerging technologies, including artificial intelligence, toward ongoing compliance efforts.

In light of these concerns, the comment encourages the Commission to adopt a more flexible and modern approach to order duration, including a default ten-year limit with tailored, provision-specific sunset periods where appropriate. You can read the full comment to the FTC here.

Summer Associate Bariela Capollari contributed to this post.

Kalshi declined to participate in the process, so NAD announced they would refer the matter “to the appropriate regulatory authorities, including relevant state Attorneys General, and to the platforms on which the advertising appeared and with which NAD has reporting relationships….”

What’s most notable about the press release is what it doesn’t say. Typically, NAD would refer this type of issue to the FTC (especially given that the issue relates to compliance with the FTC’s own Endorsement Guides). It’s interesting to note, then, that NAD didn’t say that it would refer this matter to the FTC.

Any bets as to how this will turn out?

The term “synthetic performer” generally refers to an asset that was created using generative AI or a software algorithm and is intended to emulate an actual (but not identifiable) human. Here are some common questions advertisers have been asking themselves about that term:

• Does the law apply if the synthetic performer only appears in the background of an ad, such as in a crowd? The law doesn’t seem to draw a distinction between “principal performers” and “extras.”
• Does the law apply if an ad includes only part of a performer, such as just a hand and wrist modeling a watch? Again, the law doesn’t seem to draw a distinction.

In the absence of any guidance, many companies plan to take a conservative approach and include disclosures for “extras” and parts of performers that were created by AI. Note, though, that the statute also encompasses creation by a “software algorithm”—a term that isn’t defined—so it could also encompass assets created by other technologies.

There are also questions about how to make the required disclosures. For example:

• What words does an advertiser have to use? The law doesn’t seem to mandate any specific words.
• What constitutes a conspicuous disclosure? Again, the law doesn’t elaborate on this.

Although some advertisers plan to use the term “synthetic performer” in their disclosures, others plan to use more commonly understood terms, such as “AI-generated image.” As for the “conspicuous” requirement, there are other laws and cases that illustrate what that could mean but it remains to be seen what NY regulators will expect in this context. 

The law includes some exceptions. For example, it generally doesn’t apply to ads or promotional materials for expressive works, audio ads, or instances in which the use of AI “solely involves the language translation of a human performer.” Most other ads are covered, though.

Advertisers will want to work with their agencies to understand when ads include synthetic performers so that they can add the necessary disclosures to their ads. A violation of the law may result in a civil penalty of $1,000 for a first violation and $5,000 for any subsequent violation. Fortunately, there is no private right of action. 

CMG and two of its agencies—MindSift and 1010 Digital Works—advertised a service that could use a special algorithm to listen in on and detect pertinent conversations from smart devices in order to target ads to consumers within a specific geographic region. According to CMG’s ads: “We can identify buyers based on casual conversations in real time. It may seem like black magic, but it’s not—it’s AI.”

According to the FTC, though, it was neither black magic nor AI. In fact, the FTC alleged that the service did not listen in on consumers’ conversations or use voice data at all. Moreover, the service did not accurately place ads in customers’ desired locations. Instead, the FTC alleged that the service consisted of CMG reselling—at a significant markup—email lists obtained from other data brokers.

The companies also claimed that consumers had opted in to the (non-existent) listening by agreeing to terms of service for certain apps. According to the FTC, accepting an app’s terms does not constitute consent for an “invasive service” of this type. In fact, in its press release, the FTC notes that if the “service had functioned as advertised, this collection and use of consumers’ voice data without adequate consent would itself violate Section 5 of the FTC Act.” 

The FTC charged all three companies with violating the FTC Act. The FTC also charged MindSift and 1010 Digital Works with a second count of violating the FTC Act by providing CMG with the “means and instrumentalities” to deceive customers through marketing materials, sales pitches, and responses to questions that misled potential customers about the service. 

Under the proposed settlement orders, CMG must pay $880,000 while MindSift and 1010 Digital Works will each pay $25,000, which will be used to provide redress to customers impacted by the companies’ practices. In addition, each company agreed not to make certain misrepresentations about its services. 

In 2023, the FTC provided some helpful guidance to companies making AI claims. Among other things, the FTC warned against claiming that something is powered by AI if it isn’t. ​“FTC technologists and others can look under the hood and analyze other materials to see if what’s inside matches up with your claims.” Although the current administration seems to have taken that guidance down, you can read our summary here.

• Aaron Frey, Maine Attorney General
• Christina Moylan, Division Chief, Consumer Protection Division

They will be joined by Kelley Drye State Attorneys General Practice Chair Paul Singer, Special Counsel Abby Stempson, Special Counsel Beth Chun, and Senior Associate Andrea deLorimier. Guest speakers will address consumer protection in Maine. They will also discuss how the Maine Constitution allows for the direct initiation of legislation by citizens. General Frey will examine the impact of this process on government, business, and individuals in Maine, with specific reference to a recent automotive right to repair law and the use of the process to address concerns with utility companies operating in the state. In addition, he will discuss the increasing role of private equity in various sectors of the consumer economy and recent Maine efforts to address this trend.

Register here.

1. Surveillance Pricing

Few concepts are receiving more attention than “surveillance pricing,” a term without a single definition but that is generally used to describe the use of personal data to set individualized prices for consumers. 

At the outset, it is important to distinguish “surveillance pricing” from more familiar and widely accepted practices, such as loyalty programs and targeted promotions. Companies have long relied on personal data to deliver discounts, coupons, and tailored offers that may result in lower prices for certain consumers. These approaches typically operate by layering personalized incentives on top of a generally applicable base price, rather than altering the base price itself for a specific individual. While loyalty discounts and surveillance pricing are arguably distinct concepts, some legislators and enforcers are lumping them together. 

For example, roughly half of U.S. states have introduced legislation addressing surveillance pricing, varying significantly in scope and highlighting an ongoing lack of consensus about what conduct is actually at issue. New York, for instance, has enacted a law requiring affirmative disclosures when a company engages in what it characterizes as “algorithmic” or “dynamic” pricing. That requirement is notably broad and, depending on how it is interpreted, could extend beyond individualized base pricing to capture practices such as loyalty programs. By contrast, Maryland’s recently enacted law takes a narrower approach, expressly excluding loyalty programs from its definition of surveillance pricing.

Notwithstanding this legislative momentum, much of the concern appears to remain largely hypothetical. That point is underscored by the FTC’s recent Section 6(b) study. While the study sought concrete information from intermediaries about their data-driven pricing practices, the resulting 2025 report nonetheless focused on theoretical scenarios and potential risks rather than documented instances of widespread “surveillance pricing.” 

Our next installment of our Pricing 101 webinar series on June 24 will focus specifically on surveillance pricing. You can register here. In the interim, for more on surveillance pricing, see our blog here.

2. Pricing Accuracy

Pricing accuracy remains an enforcement priority. At its core is a straightforward question: does the price a consumer sees match the price they ultimately pay at checkout? While this issue has traditionally arisen in brick-and-mortar retail settings, it continues to be highly relevant as retailers adopt new technologies such as electronic shelf labels (ESLs).

ESLs can improve pricing accuracy by syncing shelf prices directly with point-of-sale systems, thereby avoiding the need for employees to manually update price tags. Manual processes are prone to error, and mistakes in changing tags are a common source of mismatches that can trigger regulatory scrutiny. By enabling real-time updates, ESLs offer a solution to that compliance challenge.

At the same time, the rollout of ESL technology has generated new questions from regulators and lawmakers. Some have raised concerns that ESL could be used to manipulate pricing in ways that resemble “surveillance pricing.” For example, policymakers have speculated about scenarios in which prices could change dynamically within a store environment, or even vary between consumers. Although there is no evidence that such practices are occurring in the marketplace, the possibility has attracted attention.

As a result, some states considering surveillance pricing legislation have proposed restrictions on, or even moratoria of, ESL use. These proposals highlight a growing tension in the policy debate: efforts to guard against perceived future risks may inadvertently undermine technologies that enhance pricing accuracy. 

3. Subscriptions and Auto-Renewals

Subscription models continue to generate enforcement activity, with the FTC alone having brought nearly a dozen subscription-related enforcement actions (see, e.g., here) over the past year. Regulators are focused on whether companies clearly disclose material terms such as cancellation fees, obtain affirmative consent, and provide easy cancellation mechanisms. The rise of subscription-based offerings has been accompanied by increased consumer complaints, particularly where consumers forget to cancel or encounter friction in doing so. Federal and state laws, including ROSCA and numerous state auto-renewal statutes, impose detailed requirements, and regulators often evaluate the entire user experience, from sign-up through cancellation.

4. Price Gouging

Price gouging laws come sharply into focus during emergencies, such as natural disasters or public health crises. These laws vary widely across states in terms of what triggers them, which goods or services are covered, and how terms such as “excessive” pricing are defined. Importantly, many are activated automatically upon a declared emergency and can remain in effect for extended periods. This means that companies that rely on dynamic or automated pricing systems could accidentally run afoul of these laws if they do not have controls to ensure that prices do not spike during these periods.

5. Line-Item Fees

The use of line-item fees continues to attract both regulatory scrutiny and private litigation. While separating charges such as shipping or service fees from base prices is not inherently problematic, issues arise when fees are inadequately disclosed, misleadingly described, or only revealed late in the purchasing process. Recent enforcement trends highlight concerns about fees labeled as “recovery” or “surcharge” fees, particularly where their rationale or calculation is unclear. 

6. Pricing Disclosures

Closely related to line-item fees is the broader issue of pricing disclosures. Any statements about price, including the purpose of fees or how costs are allocated, must be accurate and not misleading. For example, regulators have scrutinized representations about “tips” for delivery services and whether consumers understand for what purposes those amounts are actually used. Clear and conspicuous disclosures of pricing terms, particularly those presented early in the consumer journey, remain a material focus.

7. Junk Fees 

The concept of “junk fees” has become a major policy focus, with regulators emphasizing the importance of all-in pricing. Whether through rulemaking or legislation, the goal is to ensure that consumers understand the total price they will pay without being surprised by mandatory add-ons. Companies should evaluate when and how fees are disclosed in light of a growing body of state fee disclosure laws and UDAP enforcement, and consider whether their pricing presentation allows consumers to make meaningful comparisons at the outset of a transaction.

8. Free Trials

Free trials, and similar introductory offers, present recurring compliance challenges. While these promotions remain popular, they are subject to heightened scrutiny when they convert into paid subscriptions. Regulators expect clear disclosures about the duration of the trial, the charges that will follow, the steps required to cancel, and sometimes notice before the end of the trial. The use of the term “free” itself can trigger additional requirements, including specific disclosure obligations in certain jurisdictions.

9. Material Changes

Changes to pricing or other key terms during the lifecycle of a consumer relationship can create significant risk if not handled properly. Many state laws require advance notice (and, in some cases, renewed consent) before material changes take effect. Beyond pricing, regulators are also examining related practices such as “shrinkflation,” where product size or composition changes without clear disclosure. 

10. Promotional Pricing and Savings Claims

Promotional pricing, including rebate programs, buy-one-get-one offers, and savings claims, remains a staple of enforcement actions. Regulators are focused on whether these promotions accurately reflect the value being offered. Misleading promotions can take many forms, from unclear rebate terms to inflated base prices used to support discount claims. 

Looking Ahead

Taken together, these ten issues reflect a broader trend: pricing is not just a business decision, it is a regulatory and reputational risk area that intersects with privacy, advertising, and competition law. As enforcement activity continues to expand and legislative proposals evolve, companies should take a fresh look at their pricing practices, disclosures, and data use. Proactive review and alignment with core consumer protection principles will be essential to navigating this increasingly complex landscape.