Leader of Manatt’s Consumer Financial Services Practice Scott Pearson was quoted in Law360 about Consumer Financial Protection Bureau Director Rohit Chopra’s “aggressive enforcement style,” exemplified by a recent lawsuit against TransUnion, that could signal what financial institutions could expect in the future.
Pearson said the TransUnion case, which the article called Chopra’s highest-profile enforcement action to date, could “be the first of many.” The CFPB alleges TransUnion used deceptive marketing tactics such as misleading button ads and hard-to-see disclosures to get consumers to sign up for subscriptions on a “negative option” billing basis, meaning they would have to cancel before a trial period ends if they want to avoid being billed monthly.
Pearson said the CFPB’s and Chopra’s actions in the TransUnion case could be a warning for others in the future.
"I don't think the bureau is trying to outlaw negative option billing, but there's no doubt they don't like it," Pearson said. "And there are lots of companies that are using negative option billing, so it would be prudent for them to take a look at what the bureau found to be an issue here and use that to inform what their disclosures look like."
Law360 subscribers can read the article here.