TRUSTe settles charges with US FTC for failures in its privacy seal programme
The US Federal Trade Commission (FTC) has charged TRUSTe, US-based provider of privacy certifications for online businesses, for deceiving consumers about its recertification program for companies’ privacy practices. The FTC Chairwoman, Edith Ramirez, said that “TRUSTe promised to hold companies accountable for protecting consumer privacy, but it fell short of that pledge. Self-regulation plays an important role in helping to protect consumers. But when companies fail to live up to their promises to consumers, the FTC will not hesitate to take action."
The FTC alleges that from 2006 until January 2013, TRUSTe failed to conduct annual re-certifications in over 1,000 cases, but its website informed consumers that companies holding TRUSTe Certified Privacy Seals receive recertification every year.
Under the terms of its settlement with the FTC, issued on 17 November, TRUSTe will be prohibited from making misrepresentations about its certification process.
TrustE’s CEO, Chris Babel wrote in a blog that the 1,000 cases represent less than 10% of the total number of annual reviews: ‘Multi-year clients that did not undergo the annual review step of their certification were reviewed when their agreements were up for renewal. Because over 90% of multi-year clients signed two-year contracts, the vast majority were reviewed every other year.’
PL&B will publish an article in the December issue of PL&B International Report analysing these developments in the framework of the US Safe Harbor and APEC’s Cross Border Privacy Rules. To subscribe, go to www.privacylaws.com