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A web-based talent search company has agreed to pay $235,000 in civil penalties to settle Federal Trade Commission charges that it failed to obtain parental consent before collecting personal information from children, and that it misled consumers about the benefits of its premium paid services.

The FTC’s complaint against Nevada-based Prime Sites, Inc. alleges that the company – doing business as Explore Talent – violated the Children’s Online Privacy Protection Act (COPPA) by collecting and disclosing children’s personal information without obtaining parental consent and by failing to detail to parents and the public its collection, use, and disclosure practices. The complaint also alleges that the company violated the FTC Act by baselessly representing to prospective purchasers of its premium services that casting directors either had interest in them or had specifically chosen them for upcoming roles.

“Explore Talent collected the personal information of more than 100,000 children, but failed to adhere to the safeguards required by law,” said Acting FTC Chairman Maureen K. Ohlhausen. “Today’s settlement provides strong relief for consumers and will help ensure children are protected going forward.”

Explore Talent has marketed itself to aspiring actors, models, and other artists as a way to search for information about upcoming auditions, casting calls, and other professional opportunities. According to the complaint, the site required users, including children under age 13, to submit personal information such as their names, email addresses, telephone numbers and mailing address in order to create a free account or a premium, paid account. The company included some of this information in user profiles that were publicly available and searchable on the company’s website.

COPPA requires that companies collecting information online about children under 13 follow a number of steps to ensure that the children’s information is protected, including clearly disclosing directly to parents how the information is used and seeking verifiable parental consent before collecting any information from a child.

Between 2014 and 2016, ExploreTalent.com had more than 100,000 members who registered as under age 13, according to the FTC complaint.

According to the complaint, the company falsely stated in its privacy policy that it does not knowingly collect personal information from children under age 13 and that accounts for such children needed to be created by a legal guardian. However, the site did not place any restrictions on users who indicated they were under age 13 and did not take steps to verify whether a profile was being created by a legal guardian.

The FTC also alleges that Explore Talent misrepresented the benefits of upgrading to a “pro membership,” which cost $39.95 a month. While the site offered accounts for free, only its pro members could apply for potential job opportunities available on the site.

To sell users on signing up for a pro membership, the company’s telemarketers falsely claimed that casting directors for particular movies were interested in casting the users in an upcoming role, according to the complaint. One user reported that a telemarketer said the casting director for a sequel of the movie “Jack Reacher” wanted the user to audition for a paid speaking role in the film – but only if the user signed up for a pro membership first. However, when the user contacted the casting director, the user was told that the film was not working with Explore Talent, and in fact, all the speaking roles in the movie had already been cast.

As part of its settlement, the defendant has agreed to a $500,000 civil penalty, which will be suspended upon payment of $235,000. In addition, the company is required to comply with COPPA requirements in the future and to delete the information it previously collected from children.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 2-0. The Department of Justice, on behalf of the FTC, filed the complaint and stipulated final order in the U.S. District Court for the District of Nevada.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

By Lesley Fair

We can’t guarantee its effectiveness in getting kids to eat their vegetables or finish their homework. But there’s one circumstance in which a Mom or Dad’s “Because I said so . . . .” is the law of the land. When it comes to the online collection of personal information from kids under 13, the Children’s Online Privacy Protection Rule (COPPA) puts parents in charge.

Read more >

Settlement marks the agency’s first children’s privacy and security case involving connected toys

Note: A conference call for media with Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection, will occur as follows:
Date: January 8, 2018
Time: 1 p.m. ET
Call-in info: (800) 230-1093; Confirmation Number: 442576
Call-in lines, which are for media only, will open 15 minutes prior to the start of the call. FTC staff will be available to take questions from the media.

Electronic toy manufacturer VTech Electronics Limited and its U.S. subsidiary have agreed to settle charges by the Federal Trade Commission that the company violated a U.S. children’s privacy law by collecting personal information from children without providing direct notice and obtaining their parent’s consent, and failing to take reasonable steps to secure the data it collected. VTech will pay $650,000 as part of the settlement with the FTC.

In a complaint filed by the Department of Justice on behalf of the FTC, the Commission alleges that the Kid Connect app used with some of VTech’s electronic toys collected the personal information of hundreds of thousands of children, and that the company failed to provide direct notice to parents or obtain verifiable consent from parents concerning its information collection practices, as required under the Children’s Online Privacy Protection Act (COPPA). In its first children’s privacy case involving Internet-connected toys, the FTC also alleges that VTech failed to use reasonable and appropriate data security measures to protect personal information it collected.

“As connected toys become increasingly popular, it’s more important than ever that companies let parents know how their kids’ data is collected and used and that they take reasonable steps to secure that data,” said Acting FTC Chairman Maureen K. Ohlhausen. “Unfortunately, VTech fell short in both of these areas.”

COPPA requires that companies collecting personal information from children under 13 online follow steps to ensure that children’s information is protected, including clearly disclosing to parents the information it collects, how the information will be used, and seeking verifiable parental consent. Companies also must take reasonable measures to protect the confidentiality, security and integrity of the personal information they collect about children.

According to the complaint against VTech, the company collected personal information from parents on its Learning Lodge Navigator online platform, where the Kid Connect app was available for download, and also through a now-defunct web-based gaming and chat platform called Planet VTech. Before using Kid Connect or Planet VTech, parents were required to register and provide personal information including their name, email address as well as their children’s name, date of birth and gender. VTech also collected personal information from children when they used the Kid Connect app.

As of November 2015, about 2.25 million parents had registered and created accounts with Learning Lodge for nearly 3 million children. This included about 638,000 Kid Connect accounts for children. In addition, about 134,000 parents in the United States created Planet VTech accounts for 130,000 children by November 2015.

With respect to Kid Connect, VTech failed to provide direct notice of its information collection and use practices to parents and did not link to its privacy policy in each area where personal information was collected from children.

At the same time, the complaint alleges that the company did not take reasonable steps to protect the information it collected through Kid Connect, such as implementing adequate safeguards and security measures to protect transmitted and stored information and implementing an intrusion prevention or detection system to alert the company of an unauthorized intrusion of its network. In November 2015, VTech was informed by a journalist that a hacker accessed its computer network and personal information about consumers including children who used its Kid Connect app.

The FTC also alleges that VTech violated the FTC Act by falsely stating in its privacy policy that most personal information submitted by users through the Learning Lodge and Planet VTech would be encrypted. The company, however, did not encrypt any of this information.

In addition to the monetary settlement, VTech is permanently prohibited from violating COPPA in the future and from misrepresenting its security and privacy practices as part of the proposed settlement. It also is required to implement a comprehensive data security program, which will be subject to independent audits for 20 years.

The FTC collaborated with the Office of the Privacy Commissioner of Canada, which is releasing its own Report of Findings. To facilitate cooperation with its Canadian partner, the FTC relied on key provisions of the U.S. SAFE WEB Act, which allows the FTC to share information with foreign counterparts to combat deceptive and unfair practices that cross national borders.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 2-0. The complaint and stipulated final order was filed in the U.S. District Court for the Northern District of Illinois.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

Earlier this week, the Federal Trade Commission and Department of Education announced plans to hold a joint workshop on the application of the Children’s Online Privacy Protection Act (“COPPA”) and the Family Educational Rights and Privacy Act (“FERPA”) to educational technology products and services in the K-12 school environment. In advance of the workshop, the FTC and Department of Education are soliciting comments on several key questions regarding COPPA and FERPA compliance for educational technology p

Source: FTC and Department of Education Announce Joint Workshop on FERPA and COPPA Compliance for Ed Tech – Lexology

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The Federal Trade Commission has published a new guide that seeks to make compliance with the Children’s Online Privacy Protection Act (COPPA) as easy as 1, 2, 3, 4, 5, 6. Drawing from its detailed FAQs, the FTC has developed an even more streamlined, six-step DIY instruction manual designed for busy businesses that want a basic compliance document that can help them pinpoint areas in their data management flow that might require additional attention.

Source: Compliance with COPPA: So easy, even a kid can do it – Lexology

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The Federal Trade Commission (FTC) updated its guidance on the Children’s Online Privacy Protection Act (COPPA). COPPA and the FTC’s related COPPA Rules establish guidelines to protect children under the age of 13 as they access the internet. The recent updates issued by the FTC make it apparent that companies, when expanding their business offerings and product portfolios, must also ensure they are adequately protecting children in their potential use of these products and offerings. Specifically, [click for more]

Source: IoT Device Companies: Add COPPA to Your “To Do” Lists | Patrick Law Group, LLC – JDSupra

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Trying to keep pace with developments in internet-connected toys and other devices for children, the Federal Trade Commission (“FTC”) announced June 21, 2017 that it has updated its guidance, a “Six-Step Compliance Plan for Your Business,” for complying with the Children’s Online Privacy Protection Act (“COPPA”). COPPA is intended to help parents control what information is collected from young children. The FTC’s updated guidance, which is intended to help businesses understand when COPPA applies and how [click for more]

Source: Hey, Alexa: What’s New in Children’s Privacy?… FTC Updates COPPA Guidance | The National Law Review

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The FTC staff published today a “Six-Step Compliance Plan” for businesses to comply with the Children’s Online Privacy Protection Act (COPPA). The guidance, which provides a useful framework for businesses, states explicitly that COPPA applies to connected toys and other devices that collect personal information from children over the Internet.

Source: FTC Staff Publish COPPA Guidance for Businesses | The National Law Review

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