Utah and Michigan Enact Laws Creating Child Protection Registries
Utah enacted House Bill 165 which creates a “Child Protection Registry.” The law allows a person to register email and instant message addresses and telephone and fax numbers (called “contact points”) that are accessible by minors. The law prohibits someone from sending a message to a contact point that advertises a product or service that minors are prohibited by law from purchasing, participating in, or viewing, such as pornography, tobacco, liquor and gambling. The law also prohibits sending a message to a contact point that contains or advertises material that is “harmful to minors” which is sexual material that has no artistic, literary, political or scientific value for minors. The registry is free for consumers, but would require advertisers to pay a fee to obtain copies of the registry. The law also prohibits using contact points from the registry to send solicitations. The law provides criminal penalties and civil fines of up to $1,000 per message, and individuals may file suit to enforce the law. The law will take effect July 1, 2005, if the Utah Division of Consumer Protection can assure the security of such a registry.
Michigan enacted a similar bill (SB 1025) which also takes effect July 1, 2005. Under both laws, minors cannot consent to receive prohibited material. Marketers may need to significantly restructure their marketing campaigns for products or services that can not be purchased by minors in those states.
Massachusetts Files First State Suit under CAN-SPAM
Massachusetts Attorney General Tom Reilly announced he has filed suit against a company accused of sending thousands of unsolicited emails offering pre-approved mortgage rates to consumers in Massachusetts, in violation of state and federal law. Specifically, the AG alleges that the email messages provided an address in Massachusetts but the company did not have a physical presence there; failed to include a functioning opt-out feature; failed to clearly identify the messages as advertisements; and used a non-functioning sender address so that consumers could not reply directly to the sender. The AG is seeking civil penalties and fines and an injunction to stop future emails.
California Court Rules that State Law Can Provide Greater Financial Privacy Protection than Federal Law
On June 30, a California court ruled that the federal Fair Credit Reporting Act (“FCRA”) does not pre-empt California’s new financial privacy law that provides greater consumer protection than the federal Gramm-Leach-Bliley Act. The case had been brought by three financial trade associations who argued that the pre-emption provision in the FCRA - a federal statute that regulates credit reporting agencies and the collection and use of credit reports - applies to state privacy laws that regulate financial information in general. The court disagreed, finding that the pre-emption provision in the FCRA applies only to credit reporting information. This means that financial institutions doing business in California must comply with the notice, consent and opt-out requirements of the California Financial Information Privacy Act (also known as SB 1), which are more restrictive than those in the Gramm-Leach-Bliley Act. The California law defines financial institution very broadly and may include some retailers.
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