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FTC Issues Updated FAQs on Amended Children’s Online Privacy Protection Rule

April 26, 2013 Comments off

FTC Issues Updated FAQs on Amended Children’s Online Privacy Protection Rule
Source: Federal Trade Commission

The Federal Trade Commission has issued an updated set of frequently asked questions designed to help website operators, mobile application developers, plug-ins and advertising networks operating on child-directed websites and online services prepare for upcoming changes to the Children’s Online Privacy Protection Rule.

The document, titled “Complying With COPPA: Frequently Asked Questions” contains information directed to websites and online services whose work online may involve the collection of personal information from children under age 13. The document provides guidance from the FTC staff that supplements the rule and other COPPA–related material previously published by the FTC.

In addition to the guidelines and frequently asked questions, FTC staff maintain a “COPPA Hotline” email address, COPPAHotLine@ftc.gov, where industry members can send questions on how to ensure they are compliant with the rule. FTC staff will periodically update the FAQs. Comments on the FAQs or suggestions for new FAQs may be submitted through the COPPA Hotline email address.

The Commission finalized amendments to the COPPA Rule last December, and they will go into effect on July 1 of this year. The process to review the rule was begun in 2010 with the intent to modernize the rule and ensure that children’s privacy protections kept up with evolving technology and changes in the way children use and access the Internet, including the increased use of mobile devices and social networking.

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FTC Releases Top 10 Complaint Categories for 2012

March 28, 2013 Comments off

FTC Releases Top 10 Complaint Categories for 2012

Source: Federal Trade Commission

Identity theft is once more the top complaint received by the Federal Trade Commission, which has released its 2012 annual report of complaints. 2012 marks the first year in which the FTC received more than 2 million complaints overall, and 369,132, or 18 percent, were related to identity theft. Of those, more than 43 percent related to tax- or wage-related fraud.

The report gives national data, as well as a state-by-state accounting of top complaint categories and a listing of the metropolitan areas that generated the most complaints. This includes the top 50 metropolitan areas for both fraud complaints and identity theft complaints.

The remainder of complaint categories making up the top 10 are:

Debt collection 199,721 10 percent

Banks and Lenders 132,340 6 percent

Shop-at-Home and Catalog Sales 115,184 6 percent

Prizes, Sweepstakes and Lotteries 98,479 5 percent

Impostor Scams 82,896 4 percent

Internet Services 81,438 4 percent

Auto-Related Complaints 78,062 4 percent

Telephone and Mobile Services 76,783 4 percent

Credit Cards 51,550 3 percent

FTC Undercover Shopper Survey on Entertainment Ratings Enforcement Finds Compliance Highest Among Video Game Sellers and Movie Theaters

March 26, 2013 Comments off

FTC Undercover Shopper Survey on Entertainment Ratings Enforcement Finds Compliance Highest Among Video Game Sellers and Movie Theaters
Source: Federal Trade Commission

A Federal Trade Commission undercover shopper survey found that video game retailers continue to enforce age-based ratings, while movie theaters have made marked improvement in box office enforcement.

Only 13 of underage shoppers were able to purchase M-rated video games, while a historic low of 24 percent were able to purchase tickets to R-rated movies. In addition, for the first time since the FTC began its mystery shop program in 2000, music CD retailers turned away more than half of the undercover shoppers. Movie DVD retailers also demonstrated steady improvement, permitting less than one-third of child shoppers to purchase R-rated DVDs and unrated DVDs of movies that had been rated R for theaters. (See Figure 1).

FTC Staff Report Examines Growing Use of Mobile Payments

March 13, 2013 Comments off

FTC Staff Report Examines Growing Use of Mobile Payments
Source: Federal Trade Commission

As part of its efforts to ensure that consumers are protected in the growing mobile marketplace, the Federal Trade Commission issued a staff report today highlighting key issues facing consumers and companies as they adopt mobile payment services. The report, titled “Paper, Plastic… or Mobile? An FTC Workshop on Mobile Payments,” is based on a workshop held by the Commission in 2012 to examine these issues.

The mobile payments arena is growing quickly, and the report notes that mobile payment cover of FTC mobile payments reportsystems can provide innovative and convenient options for consumers. But the report also notes three major areas of potential concern for consumers.

First, the report encourages companies to develop clear policies on how consumers can resolve disputes arising from a fraudulent mobile payment or an unauthorized charge.

Consumers fund mobile purchases using a variety of sources, from credit cards to prepaid debit cards to charges placed on their mobile phone bills. Under current regulations, each of these funding methods has a different process for consumers to dispute unauthorized charges, with varying levels of consumer protection. This creates a potentially confusing landscape for consumers trying to decide which mobile payment system to use and how to fund these payments, the report notes.

The report also highlights the growing problem of mobile “cramming,” which occurs when third parties place unauthorized charges onto consumers’ mobile phone bills. The Commission discussed this issue in its previous comment to the Federal Communications Commission, and the FTC staff has announced a mobile cramming roundtable to be held in May.

Second, the report encourages industry-wide adoption of strong measures to ensure security throughout the mobile payment process. The report addresses ways sensitive financial information can be kept secure during the mobile payment process, such as through end-to-end encryption. The possibilities for encryption listed in the report cover everything from the authentication of data during the transaction to the secure storage of information on a mobile device.

Third, the report highlights the need for companies in the mobile payment sphere to practice “privacy by design,” incorporating strong privacy practices, consumer choice, and transparency into their products from the outset. Doing so, the report notes, increases the likelihood of consumer trust in the mobile payment process.

In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans

February 14, 2013 Comments off

In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans
Source: Federal Trade Commission

A Federal Trade Commission study of the U.S. credit reporting industry found that five percent of consumers had errors on one of their three major credit reports that could lead to them paying more for products such as auto loans and insurance.

Overall, the congressionally mandated study on credit report accuracy found that one in five consumers had an error on at least one of their three credit reports.

“These are eye-opening numbers for American consumers,” said Howard Shelanski, Director of the FTC’s Bureau of Economics. “The results of this first-of-its-kind study make it clear that consumers should check their credit reports regularly. If they don’t, they are potentially putting their pocketbooks at risk.”

The study, in which participants were encouraged to use the Fair Credit Reporting Act (FCRA) process to resolve any potential credit report errors, also found that:

  • One in four consumers identified errors on their credit reports that might affect their credit scores;
  • One in five consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports;
  • Four out of five consumers who filed disputes experienced some modification to their credit report;
  • Slightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report; and
    Approximately one in 20 consumers had a maximum score change of more than 25 points and only one in 250 consumers had a maximum score change of more than 100 points.

Other study results can be found in the executive summary of the report.

FTC Staff Report Recommends Ways to Improve Mobile Privacy Disclosures

February 4, 2013 Comments off

FTC Staff Report Recommends Ways to Improve Mobile Privacy Disclosures

Source: Federal Trade Commission

The Federal Trade Commission, the nation’s chief privacy agency, issued a staff report recommending ways that key players in the rapidly expanding mobile marketplace can better inform consumers about their data practices.

The report makes recommendations for critical players in the mobile marketplace: mobile platforms (operating system providers, such as Amazon, Apple, BlackBerry, Google, and Microsoft), application (app) developers, advertising networks and analytics companies, and app developer trade associations. Most of the recommendations involve making sure that consumers get timely, easy-to-understand disclosures about what data they collect and how the data is used.

Google Agrees to Change Its Business Practices to Resolve FTC Competition Concerns In the Markets for Devices Like Smart Phones, Games and Tablets, and in Online Search

January 4, 2013 Comments off

Google Agrees to Change Its Business Practices to Resolve FTC Competition Concerns In the Markets for Devices Like Smart Phones, Games and Tablets, and in Online Search
Source: Federal Trade Commission

Google Inc. has agreed to change some of its business practices to resolve Federal Trade Commission concerns that those practices could stifle competition in the markets for popular devices such as smart phones, tablets and gaming consoles, as well as the market for online search advertising.

Under a settlement reached with the FTC, Google will meet its prior commitments to allow competitors access – on fair, reasonable, and non-discriminatory terms – to patents on critical standardized technologies needed to make popular devices such as smart phones, laptop and tablet computers, and gaming consoles. In a separate letter of commitment to the Commission, Google has agreed to give online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms; and to refrain from misappropriating online content from so-called “vertical” websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.

FTC’s Second Kids’ App Report Finds Little Progress in Addressing Privacy Concerns Surrounding Mobile Applications for Children

December 10, 2012 Comments off

FTC’s Second Kids’ App Report Finds Little Progress in Addressing Privacy Concerns Surrounding Mobile Applications for Children
Source: Federal Trade Commission

The Federal Trade Commission issued a new staff report, “Mobile Apps for Kids: Disclosures report coverStill Not Making the Grade,” examining the privacy disclosures and practices of apps offered for children in the Google Play and Apple App stores. The report details the results of the FTC’s second survey of kids’ mobile apps.

Since FTC staff’s first survey of kids’ mobile apps in 2011, staff found little progress toward giving parents the information they need to determine what data is being collected from their children, how it is being shared, or who will have access to it. The report also finds that many of the apps surveyed included interactive features, such as connecting to social media, and sent information from the mobile device to ad networks, analytics companies, or other third parties, without disclosing these practices to parents.

FTC Leads Joint Law Enforcement Effort Against Companies That Allegedly Made Deceptive “Cardholder Services” Robocalls

November 2, 2012 Comments off

FTC Leads Joint Law Enforcement Effort Against Companies That Allegedly Made Deceptive “Cardholder Services” Robocalls

Source: Federal Trade Commission

The Federal Trade Commission escalated its campaign against illegal, unwanted robocalls announcing that it pulled the plug on five companies based in Arizona and Florida allegedly responsible for millions of illegal pre-recorded calls from “Rachel” and others from “Cardholder Services.” State partners in Arizona, Arkansas, and Florida also took legal action against similar companies.

Just two weeks after the FTC held a summit in Washington, DC, to examine the robocall problem, federal courts granted the agency’s request to temporarily halt five robocall operations that allegedly deceived consumers into paying hundreds or thousands of dollars by making phony claims that they could reduce credit card interest rates in return for an upfront fee.

“At the FTC, Rachel from Cardholder Services is public enemy number one,” said FTC Chairman Jon Leibowitz. “We’re cracking down on illegal robocalls by bringing law enforcement actions and pursuing technical solutions to the problem.”

The FTC gets more than 200,000 complaints each month about telemarketing robocalls, including calls from “Rachel” that pitch consumers with a supposedly easy way to save money by reducing their credit card interest rates. After collecting an up-front fee, however, the FTC believes that the companies do little if anything to fulfill their promises.

At the recent Robocall Summit, the FTC issued a challenge to the public offering a $50,000 cash prize for the best technical solution to block illegal robocalls on landlines and mobile phones.

FTC Recommends Best Practices for Companies That Use Facial Recognition Technologies

October 22, 2012 Comments off

FTC Recommends Best Practices for Companies That Use Facial Recognition Technologies

Source: Federal Trade Commission

The Federal Trade Commission today released a staff report "Facing Facts: Best Practices for Common Uses of Facial Recognition Technologies" for the increasing number of companies using facial recognition technologies, to help them protect consumers’ privacy as they use the technologies to create innovative new commercial products and services.

Facial recognition technologies have been adopted in a variety of contexts, ranging from online social networks and mobile apps to digital signs, the FTC staff report states. They have a number of potential uses, such as determining an individual’s age range and gender in order to deliver targeted advertising; assessing viewers’ emotions to see if they are engaged in a video game or a movie; or matching faces and identifying anonymous individuals in images.

Facial recognition also has raised a variety of privacy concerns because – for example – it holds the prospect of identifying anonymous individuals in public, and because the data collected may be susceptible to security breaches and hacking.

FTC Issues FY 2012 National Do Not Call Registry Data Book

October 17, 2012 Comments off

FTC Issues FY 2012 National Do Not Call Registry Data Book
Source: Federal Trade Commission

The Federal Trade Commission today issued the National Do Not Call Registry Data Book for Fiscal Year 2012. The FTC’s National Do Not Call Registry lets consumers choose not to receive telemarketing calls. In its fourth year of publication, the Data Book contains a wealth of information about the Registry for FY 2012 (from October 1, 2011 to September 30, 2012), including:

  • The number of active registrations and consumer complaints since the Registry began in 2003;
  • FY 2012 complaint figures by month and type;
  • FY 2012 registration and complaint figures for all 50 states and the District of Columbia by population;
  • Rankings of the number of Do Not Call registrations by state population;
  • The number of entities accessing the Registry by fiscal year; and
  • An appendix on registration and complaint figures by state and area code.

According to the Data Book, at the end of FY 2012, the Do Not Call Registry contained 217,568,135 actively registered phone numbers, up from 209,722,924 at the end of FY 2011. In addition, the number of consumer complaints about unwanted telemarketing calls received increased from 2,273,516 during FY 2011 to 3,840,572 during FY 2012.

This year’s Data Book also reveals trends in complaint data. In addition to providing information on the total number of consumer complaints per month, it also contains data on the number of monthly complaints specifically related to pre-recorded telemarketing “robocalls,” and requests for a telemarketer to stop calling.

FTC Releases Reports on Cigarette and Smokeless Tobacco Advertising and Promotion

October 2, 2012 Comments off

FTC Releases Reports on Cigarette and Smokeless Tobacco Advertising and Promotion

Source: Federal Trade Commission

The amount spent on cigarette advertising and promotion by the largest cigarette companies in the United States declined from $9.94 billion in 2008 to $8.53 billion in 2009, and again to $8.05 billion in 2010, according to a report released today by the Federal Trade Commission.

The Commission has issued the Cigarette Report periodically since 1967, and another one, the Smokeless Tobacco Report, periodically since 1987.

The largest spending category in the Cigarette Report in both 2009 and 2010 was spending on price discounts paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers. This category accounted for $6.67 billion, or 78.2 percent of total spending on advertising and promotion in 2009, and $6.49 billion, or 80.7 percent of that total, in 2010.

The number of cigarettes sold or given away to wholesalers and retailers in the United States declined from 322.6 billion in 2008 to 290.3 billion in 2009, and to 282.0 billion in 2010.

According to the Smokeless Tobacco Report for the major manufacturers of smokeless tobacco products in the United States:

  • Their spending on advertising and promotion fell from $547.87 million in 2008 to $492.10 million in 2009, and again to $444.20 million in 2010.
  • The dollar value of sales by these manufacturers fell from $2.76 billion in 2008 to $2.61 billion in 2009, then rose to $2.78 billion in 2010.
  • The weight of smokeless tobacco sold fell from 119.90 million pounds in 2008 to 117.70 million pounds in 2009, and rose to 120.50 million pounds in 2010.

FTC Issues Revised “Green Guides”

October 1, 2012 Comments off

FTC Issues Revised "Green Guides"

Source: Federal Trade Commission

The Federal Trade Commission issued revised “Green Guides” that are designed to help marketers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive.

The revisions to the FTC’s Green Guides reflect a wide range of public input, including hundreds of consumer and industry comments on previously proposed revisions. They include updates to the existing Guides, as well as new sections on the use of carbon offsets, “green” certifications and seals, and renewable energy and renewable materials claims.

“The introduction of environmentally friendly products into the marketplace is a win for consumers who want to purchase greener products and for producers who want to sell them,” said FTC Chairman Jon Leibowitz. “But this win-win can only occur if marketers’ claims are truthful and substantiated. The FTC’s changes to the Green Guides will level the playing field for honest business people and it is one reason why we had such broad support.”

In revising the Green Guides, the FTC modified and clarified sections of the previous Guides and provided new guidance on environmental claims that were not common when the Guides were last reviewed.

FTC Advises Parents How to Protect Kids’ Personal Information at School

August 21, 2012 Comments off

FTC Advises Parents How to Protect Kids’ Personal Information at School
Source: Federal Trade Commission

A new school year usually means filling out paperwork like registration forms, health forms, and emergency contact forms, to name a few. The Federal Trade Commission wants parents to know that many school forms require personal and sensitive information that, in the wrong hands, could be used to commit fraud in their child’s name.

A criminal can use a child’s Social Security number to get government benefits, open bank and credit card accounts, or rent a place to live. Most parents and guardians don’t expect their child to have a credit file, and rarely order or monitor a child’s credit report. Child identity theft may go undetected for years – until the child applies for a job or loan and discovers problems in a credit report.

To help limit the risks of child identity theft, the Federal Trade Commission offers Protecting Your Child’s Personal Information at School. It explains how the federal Family Educational Rights and Privacy Act protects the privacy of student records and gives parents of school-age children the right to opt out of sharing contact information with third parties. It also suggests that parents ask their child’s school about its directory information policy, learn about privacy policies of sports or music activities that are not school-sponsored, and find out what to do if their child’s school experiences a data breach.

The second publication, Safeguarding Your Child’s Future, offers tips on how to keep your child’s data safe at home and online, and explains the warning signs of child identity theft. It also explains how parents and guardians can check whether their child has a credit report, and what to do if the report has errors.

FTC Tells Consumers They May Be Due a Refund If They Purchased Disney- or Marvel Hero-themed Children’s Vitamins

August 19, 2012 Comments off

FTC Tells Consumers They May Be Due a Refund If They Purchased Disney- or Marvel Hero-themed Children’s Vitamins
Source: Federal Trade Commission

Have you purchased Disney- or Marvel Hero-themed vitamins for your kids during the last few years – vitamins that featured characters such as the Disney Princesses, Winnie the Pooh, Finding Nemo, and Spider-Man? If so, the Federal Trade Commission wants you to know that you may be due a refund.

The FTC is providing these refunds as a result of a settlement with a vitamin marketer named NBTY Inc. and two subsidiaries, which agreed to pay $2.1 million to settle charges that they made false health claims about their multivitamins.

The vitamins were sold by major retailers such as CVS Pharmacy, Wal-Mart, Target, Walgreens, Kroger, Kmart, Meijer, and Rite Aid, as well as online. The FTC urges consumers who believe they may have purchased them between May 1, 2008 and September 30, 2010, to file a claim online, or call 866-224-4336 and request a paper claim form in the mail. Eligible consumers will have until October 12, 2012 to file their claims.

Taking Charge: What to Do if Your Identity Is Stolen

August 7, 2012 Comments off

Taking Charge: What to Do if Your Identity Is Stolen (PDF)
Source: Federal Trade Commission

Identity theft happens when someone steals your personal information and uses it without your permission. It is a serious crime that can wreak havoc with your finances, credit history, and reputation – and it can take time, money, and patience to resolve. The Federal Trade Commission (FTC), the nation’s consumer protection agency, prepared this guide to help you repair the damage that identity theft can cause, and reduce the risk of identity theft happening to you.

If you suspect that someone has stolen your identity, acting quickly is the best way to limit the damage. Setting things straight involves some work. This guide has tips, worksheets, blank forms, and sample letters to guide you through the recovery process. It covers:

  • what identity theft victims must do immediately
  • what problems may crop up
  • how you can reduce your risk of identity theft

FTC Seeks Comments on Additional Proposed Revisions to Children’s Online Privacy Protection Rule

August 3, 2012 Comments off

FTC Seeks Comments on Additional Proposed Revisions to Children’s Online Privacy Protection Rule

Source: Federal Trade Commission

The Federal Trade Commission is publishing a Federal Register Notice seeking public comments on additional proposed modifications to the Children’s Online Privacy Protection Rule.

In updating the Rule to keep current with technology advances, in September 2011, the FTC issued a Notice of Proposed Rulemaking seeking comment on proposed changes to the Commission’s COPPA Rule. The Commission received 350 comments. In response to those comments and informed by its experience in enforcing and administrating the Rule, the FTC now proposes to modify certain definitions to clarify the scope of the Rule and strengthen its protections for the online collection, use, or disclosure of children’s personal information.

The proposed modifications to the definitions of "operator" and "website or online service directed to children" would allocate and clarify the responsibilities under COPPA when third parties such as advertising networks or downloadable software kits ("plug-ins") collect personal information from users through child-directed websites or services. The Commission proposes to state within the definition of "operator" that personal information is "collected or maintained on behalf of" an operator where it is collected in the interest of, as a representative of, or for the benefit of, the operator. This change would make clear that an operator of a child-directed site or service that chooses to integrate the services of others that collect personal information from its visitors should itself be considered a covered "operator" under the Rule.

FTC Alerts Consumers Who Want to Help Colorado Movie Theater Shooting Victims

July 27, 2012 Comments off

FTC Alerts Consumers Who Want to Help Colorado Movie Theater Shooting Victims

Source: Federal Trade Commission

The Federal Trade Commission, the nation’s consumer protection agency, has tips for anyone who may want to donate money to the victims and families of the Aurora, Colorado, movie theater shooting.

One opportunity for giving, the Aurora Victim Relief Fund, has been established by Colorado Governor John Hickenlooper and the Community First Foundation to meet immediate and long-term needs of victims and their families. Donations are being accepted through the Foundation’s GivingFirst.org program, which describes how various nonprofit organizations are offering direct support to those affected.

Unfortunately, legitimate charities face competition from fraudsters who either solicit for bogus charities or aren’t entirely honest about how a so-called charity will use your contribution. It’s wise to be wary of charities that spring up overnight in connection with current events, like the theater shooting.

Urgent appeals for aid that you get in person, by phone or mail, by e-mail, on websites, or on social networking sites may not be on the up-and-up. The agency’s Charity Checklist has tips for guidance on donating wisely.

FTC Report: Many Consumers Believe “Up To” Claims Promise Maximum Results

July 17, 2012 Comments off

FTC Report: Many Consumers Believe “Up To” Claims Promise Maximum Results
Source: Federal Trade Commission

The Federal Trade Commission today released an FTC-commissioned study indicating that when marketers use the phrase “up to” in claims about their products, many consumers are likely to believe that they will achieve the maximum “up to” results. The study describes what a test group of consumers thought about ads for replacement home windows that purportedly would provide “up to 47%” savings in energy costs.

The FTC believes the report will help guide advertisers to avoid the use of misleading “up to” claims. It reinforces the FTC’s view that advertisers using these claims should be able to substantiate that consumers are likely to achieve the maximum results promised under normal circumstances.

The report summarizes the results of a test conducted in conjunction with investigations of five companies that, in February, settled FTC charges that they made unsupported claims about their windows’ energy efficiency and how much they would reduce consumers’ heating and cooling bills. The cases are part of the agency’s efforts to ensure that environmental marketing is truthful and based on scientific evidence.

FTC Proposes Changes to Energy Labels for Home Heating and Cooling Equipment

June 24, 2012 Comments off

FTC Proposes Changes to Energy Labels for Home Heating and Cooling Equipment
Source: Federal Trade Commission

The Federal Trade Commission is seeking public comment on changes the agency is proposing to make to the EnergyGuide labels that are required for residential furnaces, central air conditioners, and heat pumps, to help consumers and businesses install equipment appropriate for their location under new Department of Energy (DOE) regional efficiency standards. The FTC proposes to amend the EnergyGuide label to provide a U.S. map showing where the product can be installed legally, a simple format for efficiency ratings, and a link to an online energy cost calculator. The FTC also proposes requiring the label on manufacturers’ websites, product packaging, and, as currently required, on the products themselves.

The DOE regional standards are mandated by the Energy Policy and Conservation Act (as amended by the Energy Independence and Security Act of 2007), which also directs the FTC to determine how energy efficiency information should be communicated to consumers. Unlike existing DOE standards, which impose uniform, national efficiency levels for heating and cooling equipment, the new standards vary by region for certain products. The new DOE requirements will become effective in May 2013 for non-weatherized gas furnaces, mobile home gas furnaces, and non-weatherized oil furnaces, and in January 2015 for weatherized gas furnaces and all central air conditioners and heat pumps.

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