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552 PART 680—AFFILIATE MARKETING

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552 PART 680—AFFILIATE MARKETING Powered By Docstoc
					                                                                     § 642.4                                                                 16 CFR Ch. I (1–1–09 Edition)

                                                                     from other text, such as inside a bor-                    680.22 Scope and duration of opt-out.
                                                                     der; and                                                  680.23 Contents of opt-out notice; consoli-
                                                                       (iv) In a type style that is distinct                       dated and equivalent notices.
                                                                                                                               680.24 Reasonable opportunity to opt out.
                                                                     from the principal type style used on                     680.25 Reasonable and simple methods of
                                                                     the same page, such as bolded,                                opting out.
                                                                     italicized, underlined, and/or in a color                 680.26 Delivery of opt-out notices.
                                                                     that contrasts with the color of the                      680.27 Renewal of opt-out.
                                                                     principal text on the page, if the solici-                680.28 Effective date, compliance date, and
                                                                     tation is in more than one color.                             prospective application.
                                                                       (b) Long notice. The long notice shall                    AUTHORITY: Sec. 214(b), Pub. L. 108-159; 15
                                                                     be a clear and conspicuous, and simple                    U.S.C. 1681s-3
                                                                     and easy to understand statement as                         SOURCE: 72 FR 61455, Oct. 30, 2007, unless
                                                                     follows:                                                  otherwise noted.
                                                                       (1) Content. The long notice shall
                                                                     state the information required by sec-                    § 680.1 Purpose and scope.
                                                                     tion 615(d) of the Fair Credit Reporting                     (a) Purpose. The purpose of this part
                                                                     Act (15 U.S.C. 1681m(d)). The long no-                    is to implement section 214 of the Fair
                                                                     tice shall not include any other infor-                   and Accu-rate Credit Transactions Act
                                                                     mation that interferes with, detracts                     of 2003, which (by adding section 624 to
                                                                     from, contradicts, or otherwise under-                    Fair Credit Reporting Act) regulates
                                                                     mines the purpose of the notice.                          the use, for marketing solicitation pur-
                                                                       (2) Form. The long notice shall:                        poses, of consumer information pro-
                                                                       (i) Appear in the solicitation;                         vided by persons affiliated with the
                                                                       (ii) Be in a type size that is no small-                person making the solicitation.
                                                                     er than the type size of the principal                       (b) Scope. This part applies to any
                                                                     text on the same page, and, for solici-                   person over which the Federal Trade
                                                                     tations provided other than by elec-                      Commission has jurisdiction that uses
                                                                     tronic means, the type size shall in no                   information from its affiliates for the
                                                                     event be smaller than 8-point type;                       purpose of marketing solicitations, or
                                                                       (iii) Begin with a heading in capital                   provides information to its affiliates
                                                                     letters and underlined, and identifying                   for that purpose.
                                                                     the long notice as the ‘‘PRESCREEN &
                                                                     OPT-OUT NOTICE’’;                                         § 680.2 Examples.
                                                                       (iv) Be in a type style that is distinct
                                                                                                                                  The examples in this part are not ex-
                                                                     from the principal type style used on
                                                                                                                               clusive. Compliance with an example,
                                                                     the same page, such as bolded,
                                                                                                                               to the extent applicable, constitutes
                                                                     italicized, underlined, and/or in a color
                                                                                                                               compliance with this part. Examples in
                                                                     that contrasts with the color of the
                                                                                                                               a paragraph illustrate only the issue
                                                                     principal text on the page, if the solici-
                                                                                                                               described in the paragraph and do not
                                                                     tation is in more than one color; and
                                                                                                                               illustrate any other issue that may
                                                                       (v) Be set apart from other text on
                                                                                                                               arise in this part.
                                                                     the page, such as by including a blank
                                                                     line above and below the statement,                       § 680.3 Definitions.
                                                                     and by indenting both the left and
                                                                     right margins from other text on the                         As used in this part:
                                                                                                                                  (a) Act. The term ‘‘Act’’ means the
                                                                     page.
                                                                                                                               Fair Credit Reporting Act (15 U.S.C.
                                                                     § 642.4 Effective date.                                   1681 et seq.).
                                                                                                                                  (b) Affiliate. The term ‘‘affiliate’’
                                                                        This part is effective on August 1,
                                                                                                                               means any company that is related by
                                                                     2005.
                                                                                                                               common ownership or common cor-
                                                                                                                               porate control with another company.
                                                                      PART 680—AFFILIATE MARKETING                                (c) Clear and conspicuous. The term
                                                                                                                               ‘‘clear and conspicuous’’ means reason-
                                                                     Sec.                                                      ably under-standable and designed to
                                                                     680.1 Purpose and scope.                                  call attention to the nature and signifi-
                                                                     680.2 Examples.
                                                                     680.3 Definitions.                                        cance of the information presented.
                                                                     680.4–680.20 [Reserved]                                      (d) Common ownership or common cor-
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                                                                     680.21 Affiliate marketing opt-out and ex-                porate control. The term ‘‘common own-
                                                                         ceptions.                                             ership or common corporate control’’

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                                                                     Federal Trade Commission                                                                            § 680.3

                                                                     means a relationship between two com-                     son’s licensed agent, and a consumer
                                                                     panies under which:                                       based on—
                                                                        (1) One company has, with respect to                     (i) A financial contract between the
                                                                     the other company:                                        person and the consumer which is in
                                                                        (i) Ownership, control, or the power                   force on the date on which the con-
                                                                     to vote 25 percent or more of the out-                    sumer is sent a solicitation covered by
                                                                     standing shares of any class of voting                    this part;
                                                                     security of a company, directly or indi-                    (ii) The purchase, rental, or lease by
                                                                     rectly, or acting through one or more                     the consumer of the persons’ goods or
                                                                     other persons;                                            services, or a financial transaction (in-
                                                                        (ii) Control in any manner over the                    cluding holding an active account or a
                                                                     election of a majority of the directors,                  policy in force or having another con-
                                                                     trustees, or general partners (or indi-                   tinuing relationship) between the con-
                                                                     viduals exercising similar functions) of                  sumer and the person, during the 18-
                                                                     a company; or                                             month period immediately preceding
                                                                        (iii) The power to exercise, directly                  the date on which the consumer is sent
                                                                     or indirectly, a controlling influence                    a solicitation covered by this part; or
                                                                     over the management or policies of a                        (iii) An inquiry or application by the
                                                                     company, as the Commission deter-                         consumer regarding a product or serv-
                                                                     mines; or                                                 ice offered by that person during the
                                                                        (2) Any person has, with respect to                    three-month period immediately pre-
                                                                     both companies, a relationship de-                        ceding the date on which the consumer
                                                                     scribed in paragraphs (d)(1)(i) through                   is sent a solicitation covered by this
                                                                     (d)(1)(iii) of this section.                              part.
                                                                        (e) Company. The term ‘‘company’’                        (2) Examples of pre-existing business re-
                                                                     means any corporation, limited liabil-                    lationships. (i) If a consumer has an ex-
                                                                     ity company, business trust, general or                   isting loan account with a creditor, the
                                                                     limited partnership, association, or                      creditor has a pre-existing business re-
                                                                     similar organization.                                     lationship with the consumer and can
                                                                        (f) Concise—(1) In general. The term                   use eligibility information it receives
                                                                     ‘‘concise’’ means a reasonably brief ex-                  from its affiliates to make solicita-
                                                                     pression or statement.                                    tions to the consumer about its prod-
                                                                        (2) Combination with other required dis-               ucts or services.
                                                                     closures. A notice required by this part                    (ii) If a consumer obtained a mort-
                                                                     may be concise even if it is combined                     gage from a mortgage lender, but refi-
                                                                     with other disclosures required or au-                    nanced the mortgage loan with a dif-
                                                                     thorized by federal or state law.                         ferent lender when the mortgage loan
                                                                        (g) Consumer. The term ‘‘consumer’’                    came due, the first mortgage lender
                                                                     means an individual.                                      has a pre-existing business relationship
                                                                        (h) Eligibility information. The term                  with the consumer and can use eligi-
                                                                     ‘‘eligibility information’’ means any                     bility information it receives from its
                                                                     information the communication of                          affiliates to make solicitations to the
                                                                     which would be a consumer report if                       consumer about its products or serv-
                                                                     the exclusions from the definition of                     ices for 18 months after the date the
                                                                     ‘‘consumer        report’’   in     section               outstanding balance of the loan is paid
                                                                     603(d)(2)(A) of the Act did not apply.                    and the loan is closed.
                                                                     Eligibility information does not in-                        (iii) If a consumer obtains a mort-
                                                                     clude aggregate or blind data that does                   gage, the mortgage lender has a pre-ex-
                                                                     not contain personal identifiers such as                  isting business relationship with the
                                                                     account numbers, names, or addresses.                     consumer. If the mortgage lender sells
                                                                        (i) Person. The term ‘‘person’’ means                  the consumer’s entire loan to an inves-
                                                                     any individual, partnership, corpora-                     tor, the mortgage lender has a pre-ex-
                                                                     tion, trust, estate, cooperative, asso-                   isting business relationship with the
                                                                     ciation, government or governmental                       consumer and can use eligibility infor-
                                                                     subdivision or agency, or other entity.                   mation it receives from its affiliates to
                                                                        (j) Pre-existing business relationship—                make solicitations to the consumer
                                                                     (1) In general. The term ‘‘pre-existing                   about its products or services for 18
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                                                                     business relationship’’ means a rela-                     months after the date it sells the loan,
                                                                     tionship between a person, or a per-                      and the investor has a pre-existing

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                                                                     § 680.3                                                                 16 CFR Ch. I (1–1–09 Edition)

                                                                     business relationship with the con-                       bility information it receives from an
                                                                     sumer upon purchasing the loan. If,                       affiliate to make solicitations to the
                                                                     however, the mortgage lender sells a                      consumer about its products or serv-
                                                                     fractional interest in the consumer’s                     ices for three months after the date of
                                                                     loan to an investor but also retains an                   the inquiry.
                                                                     ownership interest in the loan, the                          (vii) If a consumer has an existing re-
                                                                     mortgage lender continues to have a                       lationship with a creditor that is part
                                                                     pre-existing business relationship with                   of a group of affiliated companies,
                                                                     the consumer, but the investor does                       makes a telephone call to the central-
                                                                     not have a pre-existing business rela-                    ized call center for the group of affili-
                                                                     tionship with the consumer. If the                        ated companies to inquire about prod-
                                                                     mortgage lender retains ownership of                      ucts or services offered by the insur-
                                                                     the loan, but sells ownership of the                      ance affiliate, and provides contact in-
                                                                     servicing rights to the consumer’s                        formation to the call center, the call
                                                                     loan, the mortgage lender continues to                    constitutes an inquiry to the insurance
                                                                     have a pre-existing business relation-                    affiliate that offers those products or
                                                                     ship with the consumer. The purchaser                     services. The insurance affiliate has a
                                                                     of the servicing rights also has a pre-                   pre-existing business relationship with
                                                                     existing business relationship with the                   the consumer and can therefore use eli-
                                                                     consumer as of the date it purchases                      gibility information it receives from
                                                                     ownership of the servicing rights, but                    its affiliated creditor to make solicita-
                                                                     only if it collects payments from or                      tions to the consumer about its prod-
                                                                     otherwise deals directly with the con-                    ucts or services for three months after
                                                                     sumer on a continuing basis.                              the date of the inquiry.
                                                                       (iv) If a consumer applies to a cred-                      (3) Examples where no pre-existing busi-
                                                                     itor for a product or service that it of-                 ness relationship is created. (i) If a con-
                                                                     fers, but does not obtain a product or                    sumer makes a telephone call to a cen-
                                                                     service from or enter into a financial                    tralized call center for a group of affili-
                                                                     contract or transaction with the cred-                    ated companies to inquire about the
                                                                     itor, the creditor has a pre-existing                     consumer’s existing account with a
                                                                     business relationship with the con-                       creditor, the call does not constitute
                                                                     sumer and can therefore use eligibility                   an inquiry to any affiliate other than
                                                                     information it receives from an affil-                    the creditor that holds the consumer’s
                                                                     iate to make solicitations to the con-                    account and does not establish a pre-
                                                                     sumer about its products or services                      existing business relationship between
                                                                     for three months after the date of the                    the consumer and any affiliate of the
                                                                     application.                                              account-holding creditor.
                                                                       (v) If a consumer makes a telephone                        (ii) If a consumer who has a loan ac-
                                                                     inquiry to a creditor about its products                  count with a creditor makes a tele-
                                                                     or services and provides contact infor-                   phone call to an af-filiate of the cred-
                                                                     mation to the creditor, but does not                      itor to ask about the affiliate’s retail
                                                                     obtain a product or service from or                       locations and hours, but does not make
                                                                     enter into a financial contract or                        an inquiry about the affiliate’s prod-
                                                                     transaction with the creditor, the cred-                  ucts or services, the call does not con-
                                                                     itor has a pre-existing business rela-                    stitute an inquiry and does not estab-
                                                                     tionship with the consumer and can                        lish a pre-existing business relation-
                                                                     therefore use eligibility information it                  ship between the consumer and the af-
                                                                     receives from an affiliate to make so-                    filiate. Also, the affiliate’s capture of
                                                                     licitations to the consumer about its                     the consumer’s telephone number does
                                                                     products or services for three months                     not constitute an inquiry and does not
                                                                     after the date of the inquiry.                            establish a pre-existing business rela-
                                                                       (vi) If a consumer makes an inquiry                     tionship between the consumer and the
                                                                     to a creditor by e-mail about its prod-                   affiliate.
                                                                     ucts or services, but does not obtain a                      (iii) If a consumer makes a telephone
                                                                     product or service from or enter into a                   call to a creditor in response to an ad-
                                                                     financial contract or transaction with                    vertisement that offers a free pro-
                                                                     the creditor, the creditor has a pre-ex-                  motional item to consumers who call a
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                                                                     isting business relationship with the                     toll-free number, but the advertise-
                                                                     consumer and can therefore use eligi-                     ment does not indicate that creditor’s

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                                                                     Federal Trade Commission                                                                            § 680.21

                                                                     products or services will be marketed                     make solicitations for marketing pur-
                                                                     to consumers who call in response, the                    poses to the consumer;
                                                                     call does not create a pre-existing busi-                    (ii) The consumer is provided a rea-
                                                                     ness relationship between the con-                        sonable opportunity and a reasonable
                                                                     sumer and the creditor because the                        and simple method to ‘‘opt out,’’ or
                                                                     consumer has not made an inquiry                          prohibit you from using eligibility in-
                                                                     about a product or service offered by                     formation to make solicitations for
                                                                     the creditor, but has merely responded                    marketing purposes to the consumer;
                                                                     to an offer for a free promotional item.                  and
                                                                        (k) Solicitation—(1) In general. The                      (iii) The consumer has not opted out.
                                                                     term ‘‘solicitation’’ means the mar-                         (2) Example. A consumer has a home-
                                                                     keting of a product or service initiated                  owner’s insurance policy with an insur-
                                                                     by a person to a particular consumer                      ance company. The insurance company
                                                                     that is—                                                  furnishes eligibility information about
                                                                        (i) Based on eligibility information                   the consumer to its affiliated creditor.
                                                                     communicated to that person by its af-                    Based on that eligibility information,
                                                                     filiate as described in this part; and                    the creditor wants to make a solicita-
                                                                        (ii) Intended to encourage the con-                    tion to the consumer about its home
                                                                     sumer to purchase or obtain such prod-                    equity loan products. The creditor does
                                                                     uct or service.                                           not have a pre-existing business rela-
                                                                        (2) Exclusion of marketing directed at                 tionship with the consumer and none of
                                                                     the general public. A solicitation does                   the other exceptions apply. The cred-
                                                                     not include marketing communica-                          itor is prohibited from using eligibility
                                                                     tions that are directed at the general                    information received from its insur-
                                                                     public. For example, television, general                  ance affiliate to make solicitations to
                                                                     circulation magazine, and billboard ad-                   the consumer about its home equity
                                                                     vertisements do not constitute solici-                    loan products unless the consumer is
                                                                     tations, even if those communications                     given a notice and opportunity to opt
                                                                     are intended to encourage consumers                       out and the consumer does not opt out.
                                                                     to purchase products and services from                       (3) Affiliates who may provide the no-
                                                                     the person initiating the communica-                      tice. The notice required by this para-
                                                                     tions.                                                    graph (a) must be provided:
                                                                        (3) Examples of solicitations. A solicita-                (i) By an affiliate that has or has pre-
                                                                     tion would include, for example, a tele-                  viously had a pre-existing business re-
                                                                     marketing call, direct mail, e-mail, or                   lationship with the consumer; or
                                                                     other form of marketing communica-                           (ii) As part of a joint notice from two
                                                                     tion directed to a particular consumer                    or more members of an affiliated group
                                                                     that is based on eligibility information                  of companies, provided that at least
                                                                     received from an affiliate.                               one of the affiliates on the joint notice
                                                                        (l) You means a person described in                    has or has previously had a pre-exist-
                                                                     § 680.1(b).                                               ing business relationship with the con-
                                                                     §§ 680.4—680.20         [Reserved]                        sumer.
                                                                                                                                  (b) Making solicitations—(1) In general.
                                                                     § 680.21 Affiliate marketing               opt-out        For purposes of this part, you make a
                                                                         and exceptions.                                       solicitation for marketing purposes if—
                                                                       (a) Initial notice and opt-out require-                    (i) You receive eligibility informa-
                                                                     ment—(1) In general. You may not use                      tion from an affiliate;
                                                                     eligibility information about a con-                         (ii) You use that eligibility informa-
                                                                     sumer that you receive from an affil-                     tion to do one or more of the following:
                                                                     iate to make a solicitation for mar-                         (A) Identify the consumer or type of
                                                                     keting purposes to the consumer, un-                      consumer to receive a solicitation;
                                                                     less—                                                        (B) Establish criteria used to select
                                                                       (i) It is clearly and conspicuously dis-                the consumer to receive a solicitation;
                                                                     closed to the consumer in writing or, if                  or
                                                                     the consumer agrees, electronically, in                      (C) Decide which of your products or
                                                                     a concise notice that you may use eli-                    services to market to the consumer or
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                                                                     gibility information about that con-                      tailor your solicitation to that con-
                                                                     sumer received from an affiliate to                       sumer; and

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