Deceptive mobile marketing practices are both illegal and unethical. Every year there are numerous consumers injured by these poor marketing behaviors and some companies are sued by individuals or by class action lawsuit. Also, the federal government, specifically the Federal Trade Commission (FTC) commonly sues companies over deceptive marketing practices, but also the Consumer Financial Protection Bureau (CFPB) can investigate, or even Department of Justice (DOJ) can also choose to prosecute in coordination with the FTC, particularly in broad consumer fraud matters.
Some recent illegal mobile marketing practices that have been settled by the FTC are:
Cerebral (an online mental health care service provider)– Over deceptive cancellation practices that have led to $ 5 million in refunds sent back to consumers. FTC allegations are they required clients to navigate a complex process in cancelling their subscriptions and slow -walking their requests and billing them in the process, along with disclosing sensitive personal health information and other sensitive data to third parties for advertising. According to the FTC, “Cerebral violated the Restore Online Shopper’s Confidence Act by failing to clearly disclose all material terms of their cancellation policies before charging customers”. In implementing a multi-step and multi-day process to cancel membership this had negative consequences on consumer as they are being billed for unwanted services. If personal health information is also transmitted to third party for advertising this can have negative consequences to customers since their private information is then made public and could potentially lead to unwanted deceptive acts such as scams, phishing, etc. (Delapuente, 2025)
Another recent FTC settlement regarding deceptive marketing methods was brough against Amazon in September 2025. The FTC allegations against Amazon is” they used deceptive methods to sign up customers for Prime subscriptions and made it exceedingly difficult to cancel” per FTC. FTC secured a $2.5 billion settlement stating that Amazon enrolled consumers into Prime subscriptions without their consent with also making it hard to cancel. FTC charged Amazon for violating the FTC Act and the Restore Online Shoppers’ confidence Act (ROSCA) with a $ 1 billion civil penalty and $1.5 billion in refunds back to harmed consumers (FTC Secures Historic $2.5 Billion Setttlement Against Amazon, 2025). This causes negative consequences on the consumer as they are billed for unwanted services and could potentially cause monetary harm if they don’t have the money available to pay the charges
Google was recently sued by class action lawsuit due to its “Location History” feature that allegedly continued to collect location data despite consumers turning of their location history in their device. An agreement was approved for $62 million and under the terms of the agreement most of the money would go to third party interest groups as cy pres awards, but this is being opposed by the 250 million mobile device users (class members) and their appeal is still pending. The law that was broken with this deceptive act is the FTC Act, Section 5. Google was also sued by California for the same violation for its California Invasion of Privacy Act (CIPA) for $93 million and also in Europe for violating the GDPR by tracking sensitive location data. Google stated the data was used for targeted advertising ads by profiling. The total settlement for this location tracking was $392 million, levied by governments and states against Google (Allyn, 2022)
When companies violate legal considerations, their possible penalties can be fines, restitution, injunctions, criminal charges, reputational damage, regulatory sanctions, and additional penalties based on the severity and nature of each violation and can be multiplied for each infraction. Financially companies can be charged with fines and / civil penalties and additional charges brought if they defy a “Notice of Penalty Offense” on deceptive advertising, privacy violations, or false marketing claims (FTC, 2021). Restitution and compensation can be levied under legal considerations by requiring the company to refund unauthorized charges, thus compensating affected parties for their losses. If a company receives court orders to cease certain violations of deceptive advertising, then they could have an injunction to trigger greater penalties or legal action to include criminal liability. If it is known by company executives or employees of intentional legal violations then criminal charges of imprisonment in addition to corporate fines. Lastly, noncompliance with legal considerations could ultimately lead to regulatory or license restrictions such as suspension of license, permit revocation, or restrictions on business activities (Kroeck, n.d.).
Despite many legal ramifications that can interfere with a company’s business, the ultimate damage done when they violate legal considerations, is loss of sales, reputation, brand loyalty, investor confidence, and loss of contracts or partnerships (Rey, 2023).
Steps and actions that an ethical marketer must take with all mobile marketing campaign:
- Follow all applicable laws and regulations with integrity to ensure actions align with words and values that demonstrate responsibility to all stakeholders, and avoid doing harm (AMA, 2025).
- Avoid all deceptive practices by providing truthful and accurate information regarding all products and services, avoid misleading claims or false advertising.
- A key action should be to compile an ethical marketing policy guide through written ethical standards and guidelines for marketing practices and including what claims can and cannot be made, data collection standards, and especially an internal consequence if violations are found (Flanagin, 2024)
- Ensure that all marketing materials are reviewed and fact-checking pipeline before releasing.
- Always obtain users consent to include communicating collection practices and how information will be used, and ensure users are aware and agree to all terms of service.
- Always provide clearly accessible opt-out and unsubscribe options so users can mange their preferences of settings (Flanagin, 2024).
- Handle all personal data responsibly with secure storage and comply with all relevant data protection regulations.
References
Abogado, R. (2023, December 29). Consequences of Noncompliance with Legislation by Companies: Explained ▷ Ordinance – Rey Abogado. King Lawyer. https://reyabogado.com/us/what-happens-if-a-company-doesnt-follow-legislation/
Allyn, B. (2022, November 14). Google pays nearly $392 million to settle sweeping location-tracking case. NPR. https://www.npr.org/2022/11/14/1136521305/google-settlement-location-tracking-data-privacy
AMA. (2025, July 15). Marketing Ethics. American Marketing Association. https://www.ama.org/marketing-ethics/
Delapuente, J. (2025, November 30). When Mobile Marketing Crosses the Line: Lessons From the FTC and What Brands Must Do Next. Jhonndelapuente. https://jhonndelapuente.wordpress.com/2025/11/30/when-mobile-marketing-crosses-the-line-lessons-from-the-ftc-and-what-brands-must-do-next/
Federal Trade Commission. (2021, September 9). Notices of Penalty Offenses. Federal Trade Commission. https://www.ftc.gov/enforcement/penalty-offenses
Flanagin, J. (2024, December 24). Ethical Marketing Guide: Best Practices for Ethical Marketers. Shopify. https://www.shopify.com/blog/ethical-marketing
FTC Secures Historic $2.5 Billion Settlement Against Amazon. (2025, September 25). Federal Trade Commission. https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-secures-historic-25-billion-settlement-against-amazon
Kroeck, L. (n.d.). What Are the Penalties If a Corporation Violates the Law? Legal Beagle. https://legalbeagle.com/what-are-the-penalties-if-a-corporation-violates-the-law.html
MORE THAN $5 MILLION IN REFUNDS SENT TO CONSUMERS AS A RESULT OF THE FTC’S ACTION AGAINST CEREBRAL OVER DECEPTIVE CANCELLATION PRACTICES. (2025, May 8). Nexis Uni; States News Service. https://advance-lexis-com.eu1.proxy.openathens.net/document/index?crid=87a2b79c-bdc5-489e-9575-38e030fe338f&pdpermalink=484ad029-77ce-48ad-87e7-5bfc20dc2d39&pdmfid=1519360&pdisurlapi=true
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