The CFPB and FTC have issued joint warnings about misleading advertising. While these warnings generally address apparent shortcomings (e.g. misrepresenting government affiliation), they signal to lenders the importance of reviewing advertising from a compliance rather than merely marketing perspective. In particular, advertisers should review not only the substance of a marketing piece but rather the entirety of a marketing campaign. For instance, a lender should review the likely audience and whether the particular product being advertised is appropriate for that audience. Lenders should take special care when it comes to marketing campaigns that may utilize media outlets that strongly favor one particular racial ethnic gender or age group, or if different products are being advertised to different media outlets strongly associated particular socioeconomic groups

In addition, the substance of the advertisement must be reviewed for any misleading statements. Remember that, when undertaking such a review, “misleading” is judged not by the standard of whether a majority would potentially be confused.  Rather, the standard is whether a large number of persons—even if a small majority—would be confused. Also, assume that any misrepresentation or confusion is material in terms of advertising.

Lenders should remember that the easiest way to get on the CFPB’s radar is advertising. If you are too aggressive in your marketing, the CFPB views that as a reflection of a company whose practices top to bottom are likely suspect. Hence, when it comes to advertising, lenders should take great care to make sure that it is reviewed in the context of an entire campaign and that mistakes in advertising—even small ones—can lead to much more serious investigations.