A heads up to finserve companies conducting direct mail acquisition to Californians

As of January 1, 2025, there’s a new law on the books in California.

Key Takeaways:

• This new law affects most finserve companies doing business in California; including banks, consumer and mortgage lenders, and insurance marketers.
• The greatest impact is the requirement for a consumer disclosure on the outer envelope.
• There are disclosure and sender identification requirements for the elements inside the envelope as well.

A heads up to finserve companies conducting direct mail acquisition to Californians

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Note: We are not lawyers, so this is not legal advice. It’s based on our research and discussions with people (some of them lawyers) who serve direct mailers.

Beginning in January 2025, CA SB 1096 will amend the Consumer Legal Remedies Act with implications for many financial service mailers. This law aims to protect consumers by tightening regulations on financial marketing materials.

You can read the full text of the bill here.

This Q & A is our quick take on this legislation and its implications:

Q: Who is affected by this new law?

A: Any company selling consumer financial products or services to California consumers via direct mail (not B2B mailings). This includes insurance and mortgage products in addition to bank and credit products.

The bill explicitly exempts entities that are listed as exempt from Division 24 of the Financial Code pursuant to Section 90002.

Q: What does this new law require?

A: The most obvious change is to the outer envelope, but you may need to modify internal contents as well.

Outer envelope:

• It must be clearly stated on the envelope that this is an advertisement and no action/payment is required

• For example: “THIS IS AN ADVERTISEMENT. YOU ARE NOT REQUIRED TO MAKE ANY PAYMENT OR TAKE ANY OTHER ACTION IN RESPONSE TO THIS OFFER.”

• The statement font size must be at least 16 points

Inside the envelope:

• That same language that is included on the outer envelope is required to appear in a font size of at least 18 points on the letter or other piece inside the OE
  • The company name and contact info of the sender must be clearly identified

• Contact info is defined as a phone number and mailing address

• Claims must be accurate and hype-free with no misleading, false, or exaggerated language
  • Include an easy opt-out method. While the legislation emphasizes the necessity of providing consumers with an easy means to decline future communications, it does not prescribe a specific method for the opt-out

QR codes & landing pages:

• Ensure linked digital content follows the same disclosure rules
  • Maintain consistent messaging across all channels

Q: When does this new law begin?

A: It already did! The new law took effect on January 1, 2025.

It’s easier to write a law than to enforce it so time will tell about the true impact of CA SB 1096 on finserve marketing efforts.

What have you heard? Do you have some info or practices to share regarding your company’s compliance? I’d love to hear about it and maybe make it part of an update on how mailers are complying with this new law. You can reach me at jeff@gundir.com.