Vol. 108 2024 Issue 2 (Mar/Apr)

Compliance Connection: Deceptive Marketing

Question: Recently, we have received several calls from customers confused by mailers appearing to be from our bank, advising them they needed to call a customer service number that was, in fact, that of a non-bank mortgage broker that we have no relationship or affiliation with. Does Indiana law prevent deceptive marketing like this?

Answer: Unfortunately, there are limited options in the Indiana code available to banks to address this kind of deceptive marketing by unaffiliated third parties. While the bank may have claims against the unaffiliated mortgage broker under common law theories of unfair trade competition and deceptive advertising, the mailer, as described, may also be a violation of the Indiana Deceptive Consumer Sales Act.1 The details of the solicitation from the unaffiliated service provider will determine the likelihood of success in seeking to enjoin this kind of solicitation from happening in the future.

The IDCSA provides that a supplier may not commit an unfair, abusive, or deceptive act, omission, or practice in connection with a consumer transaction. The IDCSA prohibits a supplier from implying that the subject of a consumer transaction has sponsorship, approval or affiliation that it does not have when the supplier knows or should reasonably know it does not have it.2 Violation of this prohibition is considered a deceptive act under the IDCSA, subjecting the violator to regulatory and civil liability.

A supplier is defined by the IDCSA to include a seller, lessor, assignor or other person who regularly engages in or solicits consumer transactions, including soliciting a consumer transaction by using a telephone facsimile machine to transmit an unsolicited advertisement.3 The solicitation by a supplier of an Indiana consumer for consumer services, including mortgages and mortgage-related products, is considered a consumer transaction under the IDCSA.

The extent to which the mailer creates the impression with the reader that it is from your bank, or an entity affiliated with your bank, will be the basis for any IDCSA claim. If you believe the mailer at issue sufficiently implies it is from your bank, you should report it to the office of the Indiana Attorney General. The IDCSA provides that the Attorney General may bring an action to enjoin any violation of the act. If the bank customer suffers a loss of any kind that arises because of their mistaken belief that the unaffiliated entity is the bank, then the customer would have a cause of action against the unaffiliated entity for violations of the IDCSA.

This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation.

  1. Ind. Code § 24-5-0.5
  2. Ind. Code § 24-5-0.5-3(b)(7)
  3. Ind. Code § 24-5-0.5-2(a)(3)

Brett Ashton is chair of Krieg DeVault’s Financial Institutions Practice. He counsels a wide array of financial institutions on complex bank acquisitions, litigation defense and avoidance strategies, strategic planning, new product development, negotiation and defense of regulatory enforcement actions, and general regulatory compliance issues.

Email Brett at

Krieg DeVault LLP is a Diamond Associate Member of the Indiana Bankers Association.

Get Social and Share!

Sign Up to Receive this Publication in your inbox

More In This Issue