FTC Issues Affiliate Marketing Rule Under FACTA
Kelley Drye Client Advisory
The Federal Trade Commission (“FTC”) issued a new rule under the Fair and Accurate Credit Transactions Act (“FACTA”) regulating the use of certain specified information shared by affiliates and used for marketing purposes. Specifically, under the Rule, a company may not use “eligibility information” received from an “affiliate” to “make” a “solicitation” to a consumer unless the consumer has received (or constructively received) a notice of such use and a “reasonable” period to exercise an opportunity to opt out.
If your company receives information about consumers from a corporate affiliate, this Rule may impose a new notice and opt-out requirement prior to your company’s use of the information for marketing purposes. The Rule applies to information relating to a consumer -- including transactional information between the consumer and the affiliate that provides the information -- if that the information was used or expected to be used for purposes of determining the consumer’s eligibility for credit, insurance, or employment, and if that information is shared with a corporate affiliate for that affiliate’s marketing purposes.
Kelley Drye’s Advertising Law Practice Group has prepared an advisory, which provides key definitions to assist in determining whether the rule applies to your particular business.