This article is not intended to be construed or interpreted as legal advice, and all clients and organizations should consult their own legal counsel on any disclosure requirements in their mail pieces.
The Illinois Consumer Fraud and Deceptive Business Practices Act and recent amendments to the California Consumer Legal Remedies Act have raised recent concern among direct mailers.
Here we share our current understanding of these bills, which is that most direct mail will not be impacted. Rather, the goal of these new laws is to curb “fake final notices” (based on comments made by Sen. Rachel Ventura and Sen. Kelly Seyarto, the bills’ respective sponsors). Further, the law is applicable to the following:
- “advertisements” as defined under the Illinois Consumer Fraud and Deceptive Practices Act
- “solicitations” for “consumer financial products or services” as defined under the California Financial Code
In Illinois, the definition is limited to “publications… solicitation or circulation to induce… any person to enter into any obligation or… any interest in any merchandise and includes every work device to disguise any form of business solicitation by using such terms as
- ‘renewal’,
- ‘invoice’,
- ‘bill’,
- ‘statement’,
- ‘reminder’, or
- ‘Final Notice’
to create an impression of existing obligation when there is none, or other language to mislead any person in relation to any sought after commercial transaction.”
In California, the statute states “a written credit or insurance solicitation that is subject to the disclosure requirements of subsection (d) of Section 1681m of Title 15 of the United States Code is not considered a ‘solicitation’, and therefore not subject to the disclosure requirements”. Further, insurance products are explicitly excluded from the definition of “financial product or service”, making them fall outside the scope of the statute.
Since there is some ambiguity in the language of both state’s bills that requires interpretation, clients are making their own decisions on how to proceed. Here are two examples:
- Client A is a Financial Services Company taking a cautious approach and printing, “This is Advertising Mail” on all Illinois and California mail in their file.
- Client B is an Insurance Provider that stated after some investigation by their legal team, they concluded the law does not apply to insurance.
So, we are recommending our clients make their own decision based on their interpretation of the law.
But, in Illinois, if the mail piece does not include the above listed words to create an impression of existing obligation when there is none, then we believe the mail piece does not need the disclosure statement printed on the piece. And our understanding of the law for California is if a legitimate credit offer or other financial product offering is being made my a legitimate entity (which would be covered by Federal disclosure laws for such offerings), they would not be subject to this law and not require the disclosure language.
We will continue to review the situation and place updates and guidance here, in this article. Hopefully there will be a firm USPS statement on the matter.
