NEW JERSEY LAW RESTRICTS USE OF BANK NAMES AND TRADEMARKS IN ADVERTISMENTS AND SOLICITATIONS
On June 13, 2007, a recently enacted New Jersey deceptive law will go into effect that restricts the use of the name or trademark of a depository institution in solicitations. See N.J. Stat. Ann. §§ 17:16Y-1 et seq. The New Jersey Senate Commerce Committee intends the bill to prevent deceptive advertising or solicitations with respect to the use of a depository institution’s trade name or trademark or those of an affiliate or subsidiary. While state statutes commonly prohibit the use of bank names without prior consent or without making certain informational disclosures [see Chapter 4 of our Credit Card Digest], the New Jersey law extends this prohibition to using or referencing certain loan information (such as a consumer’s loan number) and includes a broadly worded prohibition on potentially confusing usage. This law may impact refinancing offers and private label and co-branded credit programs in ways not previously contemplated.
The New Jersey law prohibits using the trade name or trademark of a depository institution, its affiliate or subsidiary in any solicitation for services or products without the consent of the depository institution, as well as using or referencing a consumer’s loan number, loan amount or other specific loan information in any solicitation for services or products without the consent of the depository institution, affiliate or subsidiary.
Most notably, the law prohibits the use of a trade name or trademark of a depository institution, its affiliate or subsidiary in any advertisement or solicitation for services or products when that use could cause any reasonable person to be confused, mistaken or deceived, initially or otherwise, as to the sponsorship, affiliation, connection or association of that person using the trade name or trademark with the depository institution, affiliate or subsidiary or as to the approval of that person using the trade name or trademark by the depository institution, affiliate or subsidiary.
A violator of the law may be liable for $1,000 per violation, as well as subject to a cease and desist order.
The enactment of this law requires companies using the trademark of a depository institution, or its subsidiary or affiliate, to evaluate their solicitations to determine whether the average consumer could misunderstand the nature of the relationship to or sponsorship of the depository institution. Please contact us if you would like a copy of the law or need assistance in evaluating your solicitation materials for compliance with this newly-enacted law.
Mike Tomkies and Kathleen Manley