Eesh this is so big.
As I have been saying since the decision was handed down, the ruling in Berman vs. Freedom Financial is absolutely TCPAWorld chnging.
In Berman the Ninth Circuit held that a Plaintiff could not be compelled to arbitration where: i) the disclosure the Defendant sought to enforce was too small; and ii) the button the consumer clicked to accept the disclosure did not advise that something legally significant was about to occur.
The ruling is absolutely critical to every company that uses online forms to obtain arbitration provisions. (I will be teaming up with Convoso and with DNC.com with webinar content on this issue soon)
It is particularly critical to one industry, however–the lead generation industry.
As TCPAWorld readers know, the lead generation industry uses online forms to obtain consent from consumers to be contacted by sellers who offer products and services those consumers might want.
Unfortunately there is no comprehensive set of legal or industry standards dictating–for instance-what size font must be used, what the level of contrast must be, what sort of language must be contained in a button, etc. As such industry participants are largely left to do as they see fit, with lead buyers carrying the bulk of the risk (although there are certainly requirements with respect to the content of the disclosure: see the Troutman Nine below.)
The Critical Troutman Nine of Express Written Consent
As I have been warning, in the absence of standards approved by a regulator and adopted it is simply a matter of time before industry participants get picked off, one by one.
And that process appears to have started yesterday.
In a new TCPA class action complaint, a consumer in California is challenging the flow on a website allegedly owned by performance marketing giant QuinStreet, Inc.
In the Complaint, Plaintiff takes issue with the following form:
The Plaintiff alleges that the disclosure language–which is found below the button and is cropped out of this portion of the complaint– “is the antithesis of conspicuous. It is printed in a tiny gray font considerably smaller than the font used in the surrounding website elements, and indeed in a font so small that it is barely legible to the naked eye. The comparatively larger font used in all of the surrounding text naturally directs the user’s attention everywhere else. And the textual notice is further deemphasized by the overall design of the webpage, in which other visual elements draw the user’s attention away from the barely readable critical text.”
Folks, that is a quote from the Ninth Circuit Court of Appeals. And this case was brought in the Northern District of California–within the binding purview of the Ninth Circuit.
It gets better (worse.)
The Plaintiff also challenges the entire flow of the website as being deceptive to the consumer.
As you can see above, the complaint challenges that the promise of “rates” is misleading since no rate is a(allegedly) actually provided to the consumer. The Complaint also challenges that the “Defendant forces consumers to provide their telephone numbers when completing the [online] Form.”
Those of you that attended LeadsCon remember our incredible 2.5 hour compliance panel in which we discussed the CRITICAL importance of website flows delivering on promises to consumers. We told you this specific issue was going to be critical in cases moving forward. And now, the chickens are coming home to roost folks.
I see the future folks. That’s why I can dress this way.
Anyway, the class here is absolutely enormous (potentially):
NO CONSENT CLASS: All persons in the United States who, within four years prior to the filing of this action, (1) Defendant placed a call using a prerecorded or artificial voice message (2) regarding property, goods, and/or services.
I don’t know how many prerecorded calls QuinStreet has left over the last four years but my guess is it is pretty big.
On the other hand, such an unwieldy class is almost certainly uncertifiable. Plaintiff has only identified two of QS’s myriad properties it is challenging so there is going to have to be a huge narrowing of the class here IMO.
Still, it is disheartening to see the Plaintiff’s bar moving to directly challenge online forms in this manner–even if it was inevitable after Berman.
The case is SHARON PIZARRO v QUINSTREET, INC. N.D. Cal. Case 3:22-cv-02803-AGT
Some take aways:
- This is only the beginning of this trend of filings. I predict dozens more in the next few months.
- Lead buyers should be extremely cautious of accepting leads that were obtained using prerecorded calls in this environment and should avoid using prerecorded calls when reaching out to data leads–this is true even where a lead supplier has warranted they have express written consent. The sand is shifting under everyone’s feet post-Berman and until there are a set of clear standards blessed by a regulator, every lead is suspect.
- Lead buyers and direct-to-consumer marketers should have fierce vendor controls in place at this point. Review publisher websites. Make sure the size of the font and the contrast and position of the disclosure meets YOUR standards, since there are no clear standards at this point.
- Make sure there is no tricky business on the website. Those of you who attended my LeadsCon seminar know EXACTLY what I mean. Those of you who did not, think about the allegations in Pizarro–consumer is promised rates. They don’t receive rates. Could be an issue…
- Lead buyers and direct-to-consumer marketers should be moving toward human selection (Safe Select and the ilk) at this point. Again, Berman creates a five alarm fire. No one–not even me–knows what disclosures are going to be safe, and which are not. This will change soon–I promise–but for now, callers should consider the safety of human selection (and I know some other companies are moving to develop their own human selection systems to rival Safe Select and I think that’s a good thing as competition is always healthy.)
- I know some of you are frustrated that I have been dragging my feet on creating R.E.A.C.H. Please bear with me for a couple more weeks. Trying to build out the world’s most perfect law firm is... a bit of a time consuming endeavor. And–perhaps unsurprisingly–there has been some blowback from the “status quo” types who are unsupportive of the movement. Helpfully, Rich Kahn gave me some a very nice piece of a future standard that will involve lead fraud detection. That guy is a real asset. REACH out to me (pun intended) for more information. Probably 60 days out at this point though.
- Call me for help. I’m easy to find.
We’ll keep an eye on this for you.