FTC CID investigation lawyer Richard B. Newman of Hinch Newman LLP makes a difference for clients by bringing extensive Federal Trade Commission (FTC) and state attorneys general civil investigative demand (CID) resolution experience on complex regulatory investigations involving advertising practices. He is a leader in navigating FTC and state AG investigations, and preventing them from becoming enforcement actions. Hinch Newman has a well-established record of implementing strategies designed for optimal resolution positioning so marketers can get back to business.
If an investigation is initiated against your company by the Federal Trade Commission, Hinch Newman is able to deploy deep knowledge of substantive legal matter and experience dealing with the FTC to carefully coordinate a full range of effective response options for the benefit of digital advertising and marketing clientele.
- Individualized Response Plans
- Negotiations and Persuasive Advocacy
- Optimal Resolution Positioning
- Investigation Closure Strategies
- Modification of Investigation Scope
- Limiting Burden and Business Disruption
- Production Sampling Techniques
Preservation of Objections and Privileges
Motions to Quash
Liability Exposure Limitation and Corrective Action Plans
Civil Investigative Demands
The Federal Trade Commission (FTC) possesses investigation powers that are defined in 6, 9 and 20 of the FTC Act. The FTC pursues cases involving unfair and deceptive trade practices through CIDs and enforcement actions and litigation.
Hinch Newman knows how to win when it comes to FTC investigations, civil investigation demands (CIDs) and subpoenas. An FTC CID attorney is singularly focused on protecting clients’ interests and appreciates the impact that regulatory investigations can have on business strategy. FTC investigation lawyer Richard B. Newman is highly-skilled at developing and implementing strategic plans to resolve government inquiries and thwart enforcement action.
FTC Consumer Protection Laws
The FTC’s primary consumer protection statute is Section 5(a) of the FTC Act, 15 U.S.C. § 45. Section 5 of the FTC Act provides that unfair or deceptive acts or practices in or affecting commerce are unlawful. The FTC relies on Section 5 to challenge everything from advertising and marketing practices to privacy and data protection practices.
FTC investigations lawyer Richard B. Newman possesses concentrated knowledge of developing case law and regulatory enforcement trends related to “unfair” and “deceptive” trade practices, claim substantiation standards, Internet free trial scams, health and safety claims, privacy and data security, undisclosed data breaches, U.S. origin claims and disclosure requirements. He regularly counsels clients on other consumer statutes, laws and regulations administered and enforced by FTC CID attorneys, including the Children’s Online Privacy Protection Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), the Restore Online Shopper’s Confidence Act and the Telemarketing Sales Rule.
How Does the FTC Investigate and Enforce the Law?
The Federal Trade Commission is an independent agency of the federal government responsible for providing consumer protection. Its mission is to protect consumers from unfair business practices. The FTC enforces federal consumer protection laws that prevent fraud and deception. FTC CID attorneys also enforce federal antitrust laws that prohibit anticompetitive mergers and other business practices that could harm the marketplace.
In order to issue a CID, a majority of the Commission must vote to utilize the compulsory process. The FTC is permitted to gather and compile information concerning, and to investigate organization, business, conduct, practices and management of any person, partnership or corporation engaged in or whose business affects commerce. Pre-complaint investigations are typically not public.
The Bureau of Competition uses CIDs and subpoenas for investigations. The Bureau of Consumer Protection utilizes CIDs and takes testimony at “investigational hearings.” Investigational hearings are similar to depositions.
CIDs differ from subpoenas. Both are used to obtain existing documents or testimony. A CID, however, can require that the recipient to file written reports or answers to interrogatories. CIDs can also require the production of tangible things and provides for service of CIDs upon entities not found within the territorial jurisdiction of any court of the United States. Alternatively, the FTC sometimes opts to request information via “access letters.”
Both subpoenas and CIDs can be the subject of a petition to limit or quash. The FTC is authorized to petition a federal district court to enforce a CID.
FTC Investigation Lawyer for Civil Investigative Demands
FTC investigations attorney Richard B. Newman is one of the most established government civil investigation demand defense counselors in the online marketing space due to his unique ability to maximize the likelihood of a successful resolution by quickly developing appropriate strategies for each individual case, including the negotiation of sampling techniques used to minimize the burden of producing documents. His impeccable reputation with regulators provide Mr. Newman’s law firm with the uncommon ability to productively confer with FTC staff to gain an understanding of the agency’s theories and concerns, and to negotiate beneficial modifications to CIDs.
Hinch Newman also utilizes its experience defending Internet advertising-related regulatory matters to educate FTC staff about the recipient’s business and the industry within which it operates, formulate solid defenses, and to prepare persuasive presentations to FTC staff and management designed to stop an investigation in its tracks.
The firm represents performance marketers in conjunction with regulatory investigations and enforcement proceedings and is dedicated to achieving the possible results for marketers faced with an FTC investigation, including case closure when possible.
CID defense is Hinch Newman’s core practice area. The firm possesses extensive experience in responding to CIDs and government investigations. It defends marketers in FTC investigations involving allegations of unfair and deceptive acts or practices and violations of consumer privacy rights with respect to user data security.
Marketers turn to Hinch Newman when their vital interests are at stake. They look to the firm’s relationships with the regulators that prosecute FTC investigations, deep knowledge of the laws and regulations that drive regulatory investigations, the broad scope of regulatory investigation services that the firm provides, and a demonstrated ability to find solutions to complex challenges.
What to do Upon Receipt of a CID
Recipients of FTC civil investigation demands are typically not given any advance notice, although sometimes word can get out that the agency has initiated an industry-wide sweep, or is issuing CIDs or subpoenas following a complaint filed with Commission. The reasons for initiating an investigation are not typically shared with targets by staff FTC investigation lawyers or examiners.
Promptly negotiating the timing and scope of a CID is always a critical factor. FTC rules dictate that recipients of CIDs must ‘meet and confer” with FTC staff within 14 days of receipt of the CID or, if sooner, before the deadline to file a petition to quash. There are also rules that cover when and how recipients must file a petition to quash
As an experienced FTC CID lawyer, Hinch Newman is often able to deduce the underlying motivation for an agency investigation, what law the FTC believes has been violated and whether the recipient is indeed a target or merely a subject. The firm’s experience defending government inquiries and subpoenas also provide it with the unique ability to determine whether the CID is, in fact, a confidential “friendly” CID sent to a non-target, and to assess various confidentiality and SAFE Web Order considerations.
Some preliminary actions upon receipt of a Federal Trade Commission CID should include implementing a preservation hold of relevant materials and consulting with an experienced FTC investigation professional that will confer with FTC staff to discern the nature of the government inquiry and potential liability exposure. Targets are often concerned about whether the investigation and sensitive information produced concurrently with it will be held in confidence by the FTC. Hinch Newman routinely negotiates and procures confidentiality agreements with agency staff designed to enable the designation of materials as “confidential” and to secure the return of such materials at the conclusion of the investigation.
FTC Regulatory Landscape Webinar
Learn Strategies for FTC Advertising Compliance, Responding to CIDs and Defending Enforcement Actions
In this recent program with Lawline - a leading provider of online continuing legal education offering intelligence to attorneys across the country - FTC defense attorney Richard B. Newman discussed advertising and promotional marketing campaign compliance, FTC CID investigations and FTC lawsuits.
Click on the thumbnail to check out a clip from the webcast.
Served an FTC CID or lawsuit? Need advertising compliance advice?
Customized Strategies for Each Individual Case
FTC investigation attorney Richard B. Newman possesses extensive experience formulating and successfully implementing individualized strategic defense responses to FTC consumer protection civil investigation demands. Targets of internet-related investigations count on his expansive knowledge of marketing and advertising practices, as well as his insight into agency enforcement policy.
The firm regularly counsels clients on strategies designed to narrow the scope of CIDs, obtain extensions of time and a phased, “rolling” document production schedule and push back against the FTC. It also provides preventative advertising compliance advice to a broad spectrum of digital marketers and advertisers, and regularly monitors FTC policy agency, press releases, enforcement actions, agency testimony and remarks by Bureau of Consumer Protection Director Andrew Smith in order to keep clients abreast of the FTC regulatory landscape.
Government consumer protection litigation attorney Richard B. Newman has provided continuing education guidance to advertising legal professionals on best practices when responding to FTC civil investigation demands. He is also a contributing author for the National Law Review, where he has written featured articles on CID defense strategies.
When responding to FTC civil investigative demands, the first step is to consult with and experienced FTC investigations lawyer that may be able to deduce whether the recipient is the subject or the target of the investigation, or whether the FTC merely believes that the recipients possesses relevant information about a third-party.
Investigation Closure Prior to Enforcement
Hinch Newman possesses a distinct ability to lay the groundwork via white papers and sophisticated analyses to argue why there has been no violation of consumer protection law or, if there has been such a violation, why pursuing the matter further is not the best course of action. Over the years, the firm has repeatedly and successfully convinced FTC investigation attorneys to close investigations without seeking any remedy from the recipient, or narrow the scope of relief sought based solely upon review of documentation, without seeking enforcement. It does so by credibly convincing the agency that enforcement is not in the public interest of that the FTC will not be successful if it initiates legal action.
As an exceedingly experienced consumer protection defense law firm, Hinch Newman works closely with clients that have received CIDs to deliberately consider the implementation of early corrective actions plans designs to thwart the initiation of enforcement proceedings altogether and weaken FTC arguments for injunctive relief in the event that litigation is commenced.
High-Profile FTC Investigations
Hinch Newman’s experience, insight and credibility with state and federal regulators provide a distinct benefit to its clients. The firm has successfully handled numerous high-profile FTC investigations initiated by the Federal Trade Commission and other stated and federal regulatory bodies. This prominent experience and proven success sets Hinch Newman apart from other CID investigation law firms.
The firm is a leader in the profession, and possesses a rare combination of consumer-defense related litigation experience and practical insight. Hinch Newman frequently handles complex FTC complaints and inquiries by implementing strategic approaches geared toward successful resolutions. This deep skill set and breadth of experience across the performance marketing industry gives the firm a unique ability to interact with regulatory officials in pursuit of the prompt resolution of investigational matters, while minimizing the disruption to its clients’ business operations.
Contact an experienced FTC consumer protection investigations lawyer to discuss a deliberately crafted approach aimed at defending your business in all phases of regulatory inquiries.
The following are examples of select regulatory investigations and enforcement matters the firm has handled to successful resolution:
- Represented developers of so-called mobile device and computer “stalking” apps in conjunction with a precedent-setting privacy and data security case brought by the Federal Trade Commission relating to such technologies. This first-ever investigation involved a number of cutting-edge, unsettled legal issues and was initiated by the FTC after a hacker was able to access the cloud storage account of the app developers. The FTC examined whether the Children’s Online Privacy Protection Act and/or Section 5 of the FTC Act had been violated. Drawing upon sophisticated knowledge of applicable advertising regulations, data privacy laws and FTC enforcement policy, the firm was able to successfully develop and implement a multi-faceted CID investigation defense strategy while productively liaising with a data security vulnerability penetration expert. As a result of these efforts, coupled with persuasive defense advocacy, this complex, highly-publicized investigation resulted in a non-monetary administrative settlement that avoided the initiation of enforcement proceedings.
- Represented an online lead generator in conjunction with a Civil Investigative Demand (CID) issued by the Federal Trade Commission examining deceptive acts and practices in connection with listings, descriptions, reviews, ratings, comparisons or endorsements of, or referrals to, providers of health-related services in violation of Section 5 of the FTC Act. The firm successfully secured the prompt closure of the investigation with no monetary penalty.
- Represented a lead aggregator in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive and unfair acts or practices in the advertising, marketing, sale or servicing of products. The FTC was also investigating whether brokers, servicers and other marketers of products and services had engaged in acts or practices in violation of other federal legislation designed to protect consumers. The firm successfully secured the prompt closure of the investigation.
- Represented an online lead generator in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive and unfair acts or practices in the advertising, marketing, sale or servicing of products. The FTC was also investigating whether consumer brokers, servicers and the other marketers of products and services had engaged in acts or practices in violation of the MARS Rule, 12 U.S.C. § 5538, and other federal legislation designed to protect consumers. The firm successfully secured the prompt closure of the investigation.
- Represented a leading software development academy in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive and unfair acts or practices in the advertising, marketing or sale of secondary or post-secondary education products or services, or educational accreditation products or services in violation of Section 5 of the FTC Act. The firm successful secured the prompt closure of the investigation.
- Represented leading industrial tool manufacturer in conjunction with an investigation initiated by the Federal Trade Commission examining the marking, advertising, labeling and other promotional activities relating to the use of unqualified domestic origin claims for products. The purpose of the investigation was to determine whether the company was engaged in unfair or deceptive acts or practices in violation of Section 5 of the FTC Act and the FTC’s enforcement policy with respect to the use of “Made in USA” claims in advertising and labeling. The firm worked with the client to implement a remedial action plan to update and qualify its representations and ensure that the company did not overstate the extent to which its products are made in the United States. As a result, the firm successfully secured the prompt closure of the investigation.
- Represented owner of company in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining alleged false and unsubstantiated representations about the health-related benefits of dietary supplements in violation of Sections 5 and 12 of the FTC Act. The firm worked closely with the client and a scientific expert to critically assess the physiological properties of product ingredients, as well as the nature and degree of data in the client’s possession prior to dissemination of claims, in order to construct persuasive legal arguments regarding a reasonable basis for advertising claims. As a result of these efforts, in addition to the persuasive utilization of cutting-edge legal precedent limiting the FTC’s judicial enforcement authority, the firm successfully resolved the matter without the initiation of litigation enforcement proceedings.
- Represented individual and corporate defendants in a Federal Trade Commission lawsuit alleging approximately $9M in consumer harm as a result of a purported products and services scam through Internet websites, telemarketing, and unsolicited emails and text messages. The FTC was prosecuting what it alleged to be deceptive acts or practices in violation of Section 5 of the FTC Act, the Telemarketing Sales Rule (16 C.F.R. Part 310), the Consumer Review Fairness Act (15 U.S.C. § 45b) and other federal legislation designed to protect consumers. The firm successfully negotiated favorable settlement terms of nominal monetary value without protracted litigation, a finding of liability or any admission of culpability, premised upon the truthfulness of defendants’ financial information.
- Represented data broker defendants in a Federal Trade Commission lawsuit alleging in excess of $4M in consumer harm as a result of the purported collection of sensitive consumer data submitted by consumers to lead generation websites and the distribution thereof to unanticipated third-parties that, in turn: (i) utilized the information to withdraw millions of dollars from consumers’ accounts without their authorization; and (ii) conducted unauthorized marketing activities by email, text message and telephone calls. The firm successfully negotiated favorable settlement terms without any admission of culpability, premised upon the truthfulness of defendants’ financial information.
- Represented an affiliate marketer defendant in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act, in connection with the marketing and sale of monitoring services. In doing so, the FTC alleged that defendant lured consumers with fake rental property ads and deceptive promises of “free” reports. The firm successfully negotiated extremely favorable settlement terms, including reduced compliance reporting and recordkeeping obligations, without protracted litigation or a finding of liability. Defendant paid only a small proportion of the damages alleged by the FTC and that an affiliate marketer co-defendant was ordered to pay, premised upon the truthfulness of submitted financial information.
- Represented online lead generators in a Federal Trade Commission lawsuit wherein the Commission sought millions of dollars in damages as a result of what the FTC described as fake blogs, fake news websites, fake testimonials, the failure to disclose material connections and bogus free trial offers in conjunction with selling Acai berry weight loss products. The firm successfully negotiated extremely favorable settlement terms without any finding of liability. Defendants paid only a small proportion of the damages that their network co-defendants were ordered to pay and an even smaller fraction of the damages sought by the FTC, premised upon the truthfulness of their financial information.
- Represented defendants in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act in connection with the marketing and sale of document preparation services. The FTC alleged that defendants falsely claimed to be affiliated with the Department of Education and charged consumers illegal fees. The firm successfully negotiated extremely favorable settlement terms, including retention of funds, and reduced compliance reporting and recordkeeping obligations, without protracted litigation or a finding of liability. Defendants paid only a small proportion of the damages alleged by the FTC, premised upon the truthfulness of submitted financial information.
- Represented individual and corporate defendants in a Federal Trade Commission lawsuit alleging approximately $3M in consumer harm as a result of a purported products and services scam. The FTC was prosecuting what it alleged to be deceptive and abusive collection practices in violation of Section 5 of the FTC Act and other federal legislation designed to protect consumers. The firm successfully negotiated favorable settlement terms of nominal monetary value without protracted litigation, a finding of liability or any admission of culpability, premised upon the truthfulness of defendants’ financial information.
- Represented affiliate marketers in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining false and misleading representations about certification programs, as well as the failure to clearly and conspicuously disclose material connections within purported independent websites. The firm successfully negotiated favorable settlement terms of nominal monetary value without any finding of liability, premised upon the truthfulness of respondents’ financial information. The firm also successfully negotiated the exclusion of additional specific instances of alleged unlawful advertising conduct.
- Represented affiliate marketers in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining false and misleading representations in conjunction with an alleged Internet business coaching scheme that purported resulted in more than $125M in consumer harm. The firm assisted the individual client regarding invocation of the 5th Amendment privilege and successfully negotiated favorable settlement terms of nominal monetary value without any finding of liability, premised upon the truthfulness of the individual client’s financial information.
- Represented affiliate marketers in conjunction with investigations by the Florida Attorney General into the promotion of weight loss and automobile insurance products/services. The firm successfully negotiated extremely favorable settlements where respondents paid only a nominal proportion of the damages alleged by the FL OAG. Both matters were resolved promptly and quietly, without any resulting litigation or admission of culpability.
- Represented a pay-per-call network in conjunction with a subpoena issued by the Illinois Attorney General. Specifically, the investigation focused upon potential violations of the Illinois Consumer Fraud and Deceptive Business Practices Act by various third-party publishers pertaining to the advertising, soliciting and generation of leads. The firm successfully secured the prompt closure of the investigation.
- Represented online marketers in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act, in connection with the marketing and sale of academic degree and certification programs. In doing so, the FTC alleged that defendants misled consumers about their association with recognized high school equivalency programs through the use of deceptive metatags and website names designed to look like legitimate online high schools. The firm successfully negotiated extremely favorable settlement terms without protracted litigation or a finding of liability. Defendants paid only a small proportion of the damages alleged by the FTC, premised upon the truthfulness of their financial information.
- Represented a corporate officer defendant in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act, in connection with the marketing and sale of personal care product trial offers. The firm successfully petitioned the court to modify a broad-sweeping asset freeze and allow distributions for personal living expenses and to fully-satisfy outstanding obligations. The firm also successfully negotiated extremely favorable settlement terms without protracted litigation or a finding of liability. Defendant paid only a small proportion of the damages alleged by the FTC, premised upon the truthfulness of financial disclosures.
- Represented a digital marketing network in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive acts or practices in connection with the creation, sale, and dissemination of online dating advertisements in violation of the FTC Act, 15 U.S.C. § 45. The firm dramatically narrowed the scope of the investigation which was promptly closed with no monetary remedy or enforcement.
- Represented a telemarketer in a Utah Division of Consumer Protection investigation regarding alleged violations of the Utah Consumer Sales Practices Act and the Telephone Fraud Prevention Act. The Utah DCP was focused upon whether consumers were contacted to make telephone solicitations while the telemarketers were not registered as a telephone soliciting business, whether the telemarketers informed consumers of the right to cancel and whether the telemarketers failed to furnish services after receipt of payment. The matter was resolved amicably and the investigation promptly closed after payment of an extremely nominal sum by respondent.
- Represented an email marketing company in an investigation by the New York Attorney General relating to alleged violations of the CAN-SPAM Act. The New York OAG was focused upon the company’s email marketing practices, related compliance considerations and third-party lead generation relationships.
- Represented an individual in conjunction with a subpoena issued by the Federal Trade Commission pertaining to a pending lawsuit alleging deceptive chain referral schemes involving cryptocurrencies. The FTC sought verbal testimony and documentation from the client. The firm successfully defended the subpoena without the client having to provide either. The matter was closed with no further inquiry or action.
- Represented an affiliate marketing network in conjunction with a subpoena issued by the United States Attorney’s Office regarding fraudulent “tech support” advertising campaigns. Specifically, the investigation focused upon alleged misrepresentations of affiliation with Microsoft, spoofed caller IDs, and the detection of viruses or other malware. The matter was concluded successfully with no further inquiry or action.
- Successfully defended full-service pharmacy located in New York City against highly-publicized consumer, New York State Office of the Attorney General and NYC Department of Consumer Affairs (n/k/a NYC Department of Consumer and Worker Protection) charges alleging the advertising or offering for sale certain necessary consumer protection goods during the outbreak of the novel coronavirus (COVID-19) at unconscionably excessive prices. The New York AG alleged violation of section 396-r of the New York General Business Law and the Rules of the City of New York (6 RCNY §5-38). The NYC DCA alleged violation of 6 RCNY §§ 5-38 and 5-42, also mandating compliance with NYC Administrative Code § 20-700, et seq. proscribing unfair, deceptive or unconscionable trade practices. The firm successfully resolved the NY OAG matter with no monetary settlement while avoiding the initiation of enforcement proceedings. The firm also successfully resolved the NYC DCA investigation by negotiating extremely favorable settlement terms where respondent paid only a small fraction of the damages alleged by the DCA. All matters were resolved quietly and amicably without any resulting litigation, finding of liability or any admission of culpability.