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Question: How can I compliantly advertise on social media when space is limited?

Answer:

This is a difficult question to answer as social media advertising is subject to the same advertising rules and requirements as other mediums used for marketing purposes, such as websites, mailers, flyers, and handouts. Thus, whether or not social media platforms limit space, a mortgage lender/broker is still obligated to disclose certain information to consumers when advertising, including, but not limited to, NMLS Unique Identifiers, the Equal Housing logo/language, and state-specific disclosures. For this reason, it is generally best practice to only permit generic advertisements that do not include loan terms or other information, such as TILA trigger terms, on social media platforms that have space constraints.

The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) previously guided internet advertising, particularly as it relates to space constraints and disclosures. Specifically, the FTC’s 2013 .com Disclosures publication provides examples of effectively disclosing in digital advertising. While acknowledging the issue of space constraints in digital advertising, the FTC advised that it may be acceptable to issue disclosures clearly and conspicuously on a separate page to which the advertisement links. In such circumstances, however, the link leading to the disclosures must be obvious and noticeable, labeled appropriately, and take the consumer directly to the disclosures without the need to “scroll” or search for the disclosures. 

Further, the FTC advised that companies using a hyperlink for disclosures should assess the effectiveness of the link by monitoring click-through rates and other information about consumer use and adjust accordingly to ensure consumers are reviewing the disclosures. Again, this is purely guidance.

The CFPB’s guidance has been less flexible. In its 2019 settlement with Freedom Debt Relief, LLC, the CFPB indicated that “in communications made through interactive media such as the internet … the disclosure must be unavoidable (which is not the case if the consumer must take any action—such as clicking on a hyperlink or hovering over an icon— to see it).”

Although many state regulators have not issued express guidance with regard to social media, social media advertising compliance is generally addressed as part of examinations and when brought to a regulator’s attention through complaints. As such, mortgage lenders and brokers must be diligent in ensuring compliance with advertising requirements on social media – including displaying disclosures clearly and conspicuously beside advertised terms.