Bureau rule applying consumer protection requirements to certain digital marketers kicks in Wednesday

An interpretive rule that applies the definition of “service provider” to digital marketers engaged in behavioral marketing is set to take effect Wednesday, when it is scheduled for publication in the Federal Register.

The Consumer Financial Protection Bureau (CFPB) said the Consumer Financial Protection Act (CFPA), which defines a “service provider” subject to federal consumer protection requirements, holds in one of its exceptions that a person is not a service provider solely by virtue of such person offering or providing to a covered person “time or space” for an advertisement for a consumer financial product or service through print, newspaper, or electronic media. However, it said this “time or space” exception does not apply to digital marketing providers that are materially involved in the development of content strategy.

The bureau said that digital marketing providers that are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer engagement, including purchase or adoption behavior, are typically service providers under the CFPA.

“Digital marketers acting as service providers can be held liable by the CFPB or other law enforcers for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations,” it said.

Reg lookup: Limited Applicability of Consumer Financial Protection Act’s “Time or Space” Exception with Respect to Digital Marketing Providers