Ohio Attorney General Marc Dann recently initiated challenges to the advertising practices of financial institutions under Ohio's Consumer Sales Practices Act. On September 19, 2007, the Attorney General filed complaints in the Franklin County Common Pleas Court against Citibank N.A., Potbelly Sandwich Works LLC, Campus Dimensions, Inc., and OSU La Bamba, Inc.
The complaints allege that the defendants "deceptively offered 'free' food and beverage items to college students, without disclosing that these 'free' items could be obtained only by completing a credit card application."
Among other things, Attorney General Dann accused the defendants of failing to clearly and conspicuously state the conditions of the offers, implementing "bait advertising," using the word "free" without setting forth the terms and conditions of the offer, and notifying prospective consumers about a prize without disclosing the conditions necessary to win it. The suit seeks permanent injunctive relief against such advertising practices, as well as monetary damages in the amount of $25,000 per violation.
Pursuant to Section 1345.01(A) of the Ohio Revised Code, both financial institutions and insurance companies are exempted from the CSPA. As defined in R.C. 5725.01, a financial institution includes a national bank. But despite the fact that Ohio law specifically exempts financial institutions and insurance companies from the strictures of the CSPA, it remains unclear how the court will rule.