This past week, several consumer actions made headlines that affect the retail industry.
Hilton Reaches $700,000 Settlement with New York and Vermont Over Data Breaches
The Attorney Generals of New York and Vermont announced a $700,000 settlement with Hilton Domestic Operating Company, Inc., formerly Hilton Worldwide, Inc. (“Hilton”), over two data breaches in 2014 and 2015.
Hilton was notified in February 2015 that it had likely suffered a data breach in December of 2014. In July of 2015, Hilton was notified of a second data breach from the prior three months. Hilton did not provide notice of either data breach until November 24, 2015. New York law requires that businesses provide notice in the “most expedient time possible and without unreasonable delay.” Vermont requires that businesses provide notice of data breaches to the Vermont Attorney General within 14 days of discovery, and within 45 days of discovery to consumers.
Under the terms of the settlements, Hilton has agreed to pay New York $400,000 and Vermont $300,000 and to comply with certain behavior remedies related to their notification and security procedures.
Trump Ends Arbitration Rule for Banks and Financial Institutions
On November 1, 2017, President Trump signed legislation designed to eliminate rules that would have empowered consumers to file class actions against covered providers of certain consumer financial products and services rather than engaging in arbitration.
The Consumer Financial Protection Bureau originally promulgated the Arbitration Rule in July 2017 as part of the Dodd-Frank Act. Had the rule gone into effect, banks and certain financial institutions would have been prohibited from preventing class action participation in their terms of service.
NAD Refers Fidget Spinner Marketer to FTC for Review of Advertising Claims
The NAD has referred a marketer of fidget spinners to the FTC. The NAD unsuccessfully sought to engage GetLitShoes.com in the self-regulatory process for ADHD claims it made regarding its AMILIFE EDC Fidget Spinner and Fidget Spinner EDC Hand Spinner.
nSpire to Cease Advertising Claims about “Cherish” Menstrual Pads
After an investigation by the NAD, nSpire Network LLC has agreed to halt certain claims about its “Cherish” line of menstrual pads. The challenge was brought by Procter & Gamble (“P&G”).
P&G alleged that nSpire made certain claims both in online advertising and on the packaging of Cherish pads related to the efficacy, comfort and safety of Cherish pads. Claims included, “We’ve got the most comfortable pad in the world” and “Totally dry.”
The NAD contacted nSpire regarding the claims. Rather than provide substantiation for the assertions, nSpire elected to completely withdraw the challenged claims. As a result, the NAD did not analyze the claims on their merits.