The state enforcers have been busy of late, many focusing efforts on combating financial fraud schemes (Last week, Julie Brill who heads the NC AG consumer protection division, noted “it is a full time job” just to keep up with predatory lending and mortgage relief scams). State legislators are also busy at work and we detail some current updates for you:
Maine: Maine has enacted a new law in effect in September restricting the collection or use of any minor’s personally identifiable information or health-related information in product or service marketing. Section 9552 of LD 1883 allows collection of such information only with parental consent but use of such information in marketing or advertising is a per se offense, regardless of whether Mom or Dad approve. The proposed law provides for civil penalties even for first time violators and a private right of action. This law goes far beyond COPPA, which provides limits on advertising to kids under 13, and reportedly is a reaction to marketing taking place to tweens on social networking sites. Not surprisingly, at least several businesses have announced an intent to challenge the law.
UPDATE (9/10/09): Maine Independent Colleges Association, the Maine Press Association, and Reid Elsevier, Inc. sued to enjoin Maine’s Predatory Marketing Practices law from going into effect on September 12, 2009. On September 9th, the court issued a stipulated order of dismissal in light of the State Defendant’s representation that it will not enforce the statute and that the Legislature will reconsider it when they reconvene in January 2010. The Court opined the statute likely violates the First Amendment on overbreadth grounds, and advised third parties considering suing to enforcing rights under the law that a private challenge "could suffer from the same constitutional infirmities."
Iowa: Effective July 1, the Consumer Fraud Act gives Iowan consumers a private right of action for fraud or deception. Iowa was the only state not to allow a private right of action under its consumer protection statute. Previously Iowans had to rely on their AG to protect them or if wanting to go it alone, had to rely on common law fraud theories, requiring a showing of reliance and intent. The new law, according to the AG, allows consumers to recover on a showing of deception and provides for recovery of attorneys fees and damages.
Florida: The Investor Protection Act expands the AG’s authority to file civil and criminal case and to seek restitution and penalties in cases involving investor fraud.
