Can’t be TRUSTe-d? Online privacy firm coughs $200k to settle 'deception' charges

FTC acts after regulation oopsie

2001: A Space Odyssey

TRUSTe, which issues the privacy seals displayed on thousands of websites, has paid a settlement over charges it deceived consumers through its Privacy Seal Program.

As part of an agreed settlement with US consumer watchdogs at the Federal Trade Commission, it also promised it would ensure all certified websites removed a reference to TRUSTe as a non-profit entity. It became a regular corporation in 2008.

TRUSTe provides seals to businesses that meet specific requirements for consumer privacy programmes which it administers, involving compliance with privacy standards such as the Children’s Online Privacy Protection Act and the US-EU Safe Harbor Framework.

The FTC’s complaint alleges that from 2006 until January 2013, TRUSTe failed to conduct annual re-certifications of companies holding TRUSTe privacy seals more than 1,000 times, contrary to assurances audits allowing continued use of its seals to take place every year.

“TRUSTe promised to hold companies accountable for protecting consumer privacy, but it fell short of that pledge,” said FTC chairwoman Edith Ramirez. “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 provider of privacy certifications for online businesses agreed to pay $200,000 to settle the case as well as agreeing to submit annual reports back to the FTC every year.

In a statement, TRUSTe said that the omission of re-certification occurred in one in 10 cases. It promised to improve its business process as well as be more careful not to misrepresent its status in future.

The agreement with the FTC covers two items: first, that TRUSTe did not ensure all certified websites removed a reference to TRUSTe as a non-profit entity after it transitioned to a for-profit enterprise in 2008; second, that TRUSTe did not complete the annual review step of certification from 2006 until January 2013 for clients who had signed up for multi-year agreements. This represents less than 10 per cent of the total number of annual reviews the company was scheduled to conduct during that time. The company has addressed both items.

TRUSTe added that it had "identified and fixed the process for annual reviews" adding extra controls to ensure that every client receives the annual review from now on. ®


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