Markets Wired - Page 1118 of 1419 - Global Financial Market News and Press Releases

FTC Approves BASF’s Application to Extend Manufacturing Agreement Related to 2009 Acquisition of Ciba; FTC Approves ConocoPhillips’ Application to Modify Final Commission Order and to Amend Licensing Agreements with Holly Corp.

FTC Approves BASF’s Application to Extend Manufacturing Agreement Related to 2009 Acquisition of Ciba

The Federal Trade Commission has approved an application by global chemical company BASF SE to extend a manufacturing agreement, entered into in compliance with a 2009 settlement order, which imposed certain requirements on BASF’s acquisition of rival Ciba Holding, Inc.

BASF had requested FTC approval to extend an agreement with Dominion Colour Corp., which acquired Ciba’s indanthrone blue (IB) high performance pigment business in January 2010. The FTC settlement order required that the Ciba IB pigment business be sold in order to resolve competition concerns about BASF’s purchase of Ciba. The order also required BASF to enter an agreement – known as a toll manufacturing agreement – to make IB pigment for the acquiring company for up to 30 months to help the acquirer transition production to its own facility.

The FTC approved Dominion as the acquirer of the IB pigment business on December 4, 2009, and also approved the toll manufacturing agreement between BASF and Dominion. The toll agreement will expire in the near future unless it is extended, and the two companies have agreed on an extension. Under the settlement, an extension requires the FTC approval.

The Commission vote approving the application was 4-0. Copies of BASF’s application can be found on the FTC’s website. (FTC File No. 081-0265; Docket No. C-4253; the staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press release April 2, 2009.)

FTC Approves ConocoPhillips’ Application to Modify Final Commission Order and to Amend Licensing Agreements with Holly Corp.

The Federal Trade Commission has approved an application by ConocoPhillips to reopen and modify a final FTC order that settled the agency’s competition concerns arising from Conoco Inc.’s 2002 merger with Phillips Petroleum Company. The FTC has also approved a change to the license agreement that ConocoPhillips has with Holly Corporation, an independent oil refining company. The changes approved by the Commission allow ConocoPhillips and Holly to make the licensing of the “Phillips” and “Phillips 66” brands non-exclusive in two states for the last two years of the FTC-required agreement between them.

As described in the application, the Commission’s order required ConocoPhillips to sell to Holly Corp. a petroleum refinery in Woods Cross, Utah, and to enter into a 10-year exclusive license allowing Holly to use “Phillips,” “Phillips 66,” and related brands at retail gasoline stations in Utah, Idaho, Wyoming, and Montana. ConocoPhillips sold the Woods Cross refinery to Holly in compliance with the FTC order, and the current agreements between ConocoPhillips and Holly include the required exclusive rights.

According to the application, ConocoPhillips and Holly have negotiated an extended agreement that continues the license agreement for seven years in the four states on a non-exclusive basis. As part of those negotiations, Holly and ConocoPhillips entered into an amended agreement that would convert Holly’s Commission-ordered license in Wyoming and Montana from an exclusive license to a non-exclusive license for the two years remaining in the current license. Accordingly, ConocoPhillips requested that the FTC reopen and modify the order to match the terms of the new agreement with Holly by removing the exclusivity requirement in Wyoming and Montana and approve the new agreement. Holly supported the application, which the FTC has now approved.

The Commission vote approving the application was 4-0. (FTC File No. 021-0040, Docket No. C-4058; the staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526; see press release dated June 27, 2011.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call
1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FYI 44.5.2011.wpd)

Last Remaining Defendants in “Hope Now” Scheme Settle FTC Charges; Order Puts Them Out of the Mortgage Relief Business

The Federal Trade Commission has obtained a settlement against the remaining defendants in an allegedly fraudulent mortgage modification scheme that will permanently ban them from the mortgage assistance business and force them to return ill-gotten gains to consumers.

The settlement with Michael Kwasnik and his law firm is part of the FTC’s ongoing crackdown on scams taking advantage of consumers in financial distress. The settlement order bans Kwasnik and the firm from advertising, marketing, promoting, or selling mortgage assistance relief products or services, or assisting others to do so, and requires them to pay $137,656 to the FTC for consumer redress.

The FTC alleged that Kwasnik and his law firm were part of an operation called Hope Now Modifications that falsely claimed to be part of HOPE NOW Alliance, a non-profit, government-endorsed mortgage assistance network.

In March 2009 the FTC charged Hope Now Modifications and its two principals with falsely advertising that they were part of the HOPE NOW Alliance. The FTC also alleged that the defendants often diverted one month’s mortgage payment as a fee from distressed homeowners, failed to help them modify their mortgages, and then denied them refunds. In September 2009, the FTC amended its complaint, adding Kwasnik and his law firm, The Law Firm of Kwasnik, Rodio, Kanowitz & Buckley P.C., as defendants, and adding allegations that all defendants violated the FTC’s Telemarketing Sales Rule by falsely advertising their services. The original defendants, Hope Now and its two principals, settled the FTC charges in July 2010. They also agreed to be banned from selling mortgage relief services and to surrender all the funds in their bank accounts, which had been frozen by the court.

In addition to the ban on mortgage assistance relief services, the settlement announced today prohibits Kwasnik and his law firm from misrepresenting the benefits, terms, or conditions of financial products and from making misrepresentations about any good or service, including claims of an affiliation with any government entity or program. They also are prohibited from violating the Telemarketing Sales Rule, and must protect and properly dispose of customer personal information.

For consumer information about avoiding mortgage and foreclosure rescue scams, see Your Home at the FTC website Money Matters.

The Commission vote approving the proposed consent order against defendants Michael Kwasnik and Kwasnik, Rodio, Kanowitz & Buckley P.C. was 4-0. The FTC filed the proposed consent order in the U.S. District Court for the District of New Jersey, and it was entered on November 4, 2011.

NOTE: This consent order is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(FTC File No. X090034; Civ. No. 1:09-cv-01204-JBS-JS)
(Hope Now NR)

FTC to Hold Third Roundtable to Address Consumer Issues in Motor Vehicle Sales, Financing and Leasing

Media Advisory

November 16, 2011

On Thursday, the Federal Trade Commission will host the third in a series of roundtables around the country to gather information on consumers’ experiences in the leasing of motor vehicles at dealerships. The roundtable also will address what has been learned about auto sales, financing and leasing at all of the roundtables; what consumer and business education initiatives would be useful; and any practices that may harm consumers significantly or that are widespread. The event will be held November 17, 2011, in the FTC’s Conference Center, 601 New Jersey Avenue, N.W., Washington, D.C.

More information, including the roundtable agenda, is available here.

WHO:	Free and open to the public
WHEN:	Thursday, November 17, 2011, 8:30 a.m. – 4:30 p.m. EST Registration starts at 7:30 a.m.
WHERE:	FTC’s Conference Center 601 New Jersey Avenue, N.W. Washington, DC
WEBCAST:	The event will be webcast live.
TWITTER:	@FTC will live-tweet the workshop. Follow the conversation using #FTCbcp

MEDIA CONTACT:

Contact Information

Office of Public Affairs
202-326-2180

FTC to Hold Public Hearing on Fur Products Name Guide

The Federal Trade Commission will hold a public hearing on December 6, 2011, to obtain input on whether to amend the agency’s Name Guide that lists the common animal names that are allowed on fur labels. The hearing is part of a review of the Name Guide required by Congress under the Truth in Fur Labeling Act of 2010 and the Federal Trade Commission’s systematic review of all current FTC rules and guides.

The Fur Products Name Guide is part of the FTC’s Fur Labeling and Advertising Rules – commonly known as the Fur Rules – which help consumers make informed buying decisions by requiring fur manufacturers and retailers to label fur products with certain information, such as the animal’s name, the name of the manufacturer, and the garment’s country of origin.

The Name Guide provides English names for fur-producing animals, listed by genus-species. In March 2011, the FTC began a review of the Name Guide, sought public comments on the Fur Rules generally, and announced upcoming changes to the Fur Rules required by Congress.

At the hearing, the Commission invites views from all interested parties on all aspects of the Guide, including using the Integrated Taxonomic Information System to determine an animal’s true English name, and views about whether the agency should modify, add or delete names for several specific species.

The hearing will be held on Tuesday, December 6, 2011, from 9 a.m. to 1 p.m., in the FTC’s Satellite Building Conference Center, 601 New Jersey Avenue NW, Washington, DC. The hearing is open to the public, and there is no fee for attendance. Pre-registration is not necessary to attend, but is encouraged so that the Commission may better plan this event. To pre-register, please e-mail your name and affiliation to [email protected].

For more information, read How to Comply with the Fur Products Labeling Act and the complete Rules and Regulations Under the Fur Products Labeling Act.

The Commission vote approving the Federal Register Notice announcing the public hearing was 4-0. It is available on the FTC’s website and as a link to this press release and will be published in the Federal Register soon. (FTC File No. P074201; the staff contact is Matthew Wilshire, Bureau of Consumer Protection, 202-326-2976)

(Fur Products Name Guide)

Statement of Jon Leibowitz, Nomination for a Second Term as Commissioner, Federal Trade Commission

Federal Trade Commission Chairman Jon Leibowitz delivered the following statement at a hearing today before the Senate Committee on Commerce, Science and Transportation to consider his nomination for a second term on the Commission:

“Chairman Rockefeller, Ranking Member Hutchison, Members of the Committee:
I am pleased to appear before you with Maureen Ohlhausen, a former FTC official, who we hope will soon be back at the agency in a new role as a Commissioner. And I am delighted to be here with my colleagues on the Commission: Tom Rosch, Edith Ramirez, and Julie Brill. I am also joined by my wife, Ruth Marcus, and our daughters, Emma and Julia.

“It has been a wonderful opportunity to serve on the FTC for the past seven years,
including the past two-and-a-half as Chairman. Just three years shy of our centennial, theFTC is the nation’s premier consumer protection agency. We play a critical role in freeing the marketplace from predatory, fraudulent, and anticompetitive conduct that tilts the playing field against consumers and honest businesspeople. And we focus on a wide range of goods and services – from high-tech computer chips to children’s mobile apps to one-way truck rentals.

“The Commission’s great strength is that we are bipartisan, collegial, and work hard to reach decisions by consensus. We are inspired by a staff that is widely recognized as oneof the most professional, diligent, and highly qualified in the federal government.

“As you know, we are a small agency with a big mission. Let me highlight just a few of the issues on which we will continue to focus:

“Pursuing unfair or deceptive practices aimed at financially distressed consumers will remain a priority for the FTC. The exponential growth of the Internet, combined with thecurrent economic downturn, has fueled a resurgence of what we call “last dollar frauds.” These are targeted at the most vulnerable consumers and include foreclosure rescue scams, sham debt relief, and bogus job opportunities. Since 2009, the FTC alone has brought 90 cases against these predators. Leveraging our resources, we partnered with State Attorneys General and other federal and state agencies on more than 400 such cases.

“As just one example, this past summer, the FTC concluded a case against Countrywide for, we alleged, mishandling consumer loans in bankruptcy and charging excessive fees for mortgage servicing. We mailed more than $108 million in redress checks to 450,000 homeowners.

“Consumer privacy will continue to be a major focus from both enforcement and policy perspectives. Ever-evolving technologies, such as mobile devices, open up the riches ofthe Internet but also pose new threats. The FTC has responded by bringing almost 100 spam and spyware cases, more than 30 data security cases, and nearly 80 cases for violations of Do Not Call in the past decade. Last December, we also released a preliminary staff report highlighting critical self-regulatory principles that seek to protect consumers’ privacy while allowing industry to continue to innovate on the Internet.

“Of course, protecting privacy in the face of new technologies will remain a challenge. We are aware of this Committee’s concerns about the privacy implications of mobile apps, flash cookies, geolocation, and facial recognition; the value of industry-wide codesof conduct; and the difficulty of safeguarding privacy when users of electronic devices every year seem to grow younger as well as more tech-savvy than their parents. We look forward to working with you to address these issues.

“Health care competition will remain very high on the FTC’s agenda. Families struggling to make it in tough economic times are particularly vulnerable to rising health care costs. We push back against this trend, challenging proposed hospital mergers likely to raise prices and fighting various anticompetitive restrictions on health care goods and services.

“An especially egregious practice that we work to restrict is the “pay-for-delay”
pharmaceutical settlement. These sweetheart deals between brand-name and generic drug makers delay entry of lower-priced generics on the market and cost Americans billions of dollars annually in higher prescription prices. Equally troubling, these agreements add to the federal deficit because taxpayers fund about one third of the nation’s prescription drugs through Medicare, veterans’ programs, and the like.

“The FTC will continue to monitor petroleum markets closely. We are keenly aware of the impact of gasoline prices on American families – households have only limited ability to reduce their gasoline consumption, so increased prices severely cut into their ability to buy other necessary goods. This past summer, FTC staff issued a study that examined the various factors that increase the price of gasoline, such as OPEC’s inherently anticompetitive behavior and rising demand in China and India. We also opened an investigation when we learned of anomalous behavior among oil refineries – profit margins were going up at the same time utilization rates were going down. Let me assure you, if we find violations of the law, we will aggressively pursue them.

“Finally, given the agency’s jurisdiction over broad sectors of the economy, we will
continue to produce various industry studies – many of which Congress requested andemphasize self-regulation. These include periodic reports on the marketing of violent entertainment to children – we examine movies, music, and video games, and next year, we will look at apps, which all too often don’t give parents guidance. The most recent study concerns the marketing of healthy food to kids. The feedback from stakeholders has helped us make dramatic improvements to the report’s recommendations. I know this Committee will have questions about the marketing part of that report, written by the FTC, and I will be happy to answer them.

“To conclude, if I am fortunate enough to be confirmed, I will continue to tackle this broad portfolio of issues with the same energy, focus, and bipartisanship that our agency has applied in the past, and to work with this Committee for the benefit of American consumers.

“Thank you.”

FTC Welcomes a New Privacy System for the Movement of Consumer Data Between the United States and Other Economies in the Asia-Pacific Region

The Federal Trade Commission welcomed the approval by the forum on Asia-Pacific Economic Cooperation (APEC) of a new initiative to harmonize cross-border data privacy protection among members of APEC. The initiative is designed to enhance the protection of consumer data that moves between the United States and other APEC members, at a time when more consumer information is moving across national borders.

On November 13, 2011, President Obama and representatives from the other APEC economies endorsed the APEC Cross-Border Privacy Rules at a meeting in Honolulu, Hawaii. The APEC privacy system is a self-regulatory code of conduct designed to create more consistent privacy protections for consumers when their data moves between countries with different privacy regimes in the APEC region. The FTC and the Department of Commerce helped develop the APEC privacy rules.

FTC Commissioner Edith Ramirez welcomed the initiative on behalf of the agency, noting that the global flow of data raises significant consumer protection issues. Ramirez has been active in the FTC effort within APEC since she joined the agency in 2010.

“With personal information now moving around the world in the blink of an eye, we need pragmatic ways to bridge the gaps between different legal systems and privacy regimes. The APEC privacy rules have the potential to significantly benefit companies, consumers, and privacy regulators and move us closer to global interoperability of privacy regimes,” Ramirez said.

Companies that wish to participate in the APEC privacy system will undergo a review and certification process by third parties that will examine corporate privacy policies and practices and enforce the new privacy rules. In addition, the FTC and privacy authorities in the APEC region that choose to participate in the program will serve as backstop enforcers of the APEC privacy rules.

The FTC, the Department of Commerce, U.S. corporations, and privacy advocacy organizations worked together with their counterparts in other APEC economies to formulate the APEC cross-border privacy rules. APEC member economies expect to launch the new privacy system next year.

In addition to the United States, the 21 APEC members include Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, and Vietnam.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

(APEC)

FTC Wins $29.8 Million Judgment in Bogus Government Grant Case

The Federal Trade Commission has won a $29.8 million judgment against the remaining defendants behind a deceptive marketing operation known as Grant Connect. The court’s order also permanently bans the defendants from promoting a variety of products and services similar to those they deceptively pitched to consumers around the country.

The FTC charged the defendants with deceiving consumers by making misleading and unsubstantiated claims about bogus products and services, including one that supposedly would help them get free government grants.

The U.S. District Court for the District of Nevada found that the defendants marketed their grant products, including Grant Connect, using pictures of President Obama and the American flag to bolster the impression that billions of dollars in free government grants were available quickly and easily for personal needs.

The court also found that the defendants: 1) deceptively marketed dietary supplements using claims unsupported by scientific research; 2) failed to adequately disclose that their credit offers were merely memberships to a shopping club; 3) made unsupported claims that consumers could earn thousands of dollars per month with a work-from-home business opportunity; 4) failed to adequately disclose that consumers who bought their products or services would be enrolled in continuity plans with significant monthly fees, often for a variety of unrelated products; 5) used fake testimonials to promote their products; and 6) debited consumers’ bank accounts on a recurring basis without obtaining consumers’ permission.

The court order announced today bans the remaining defendants from marketing or selling:

grant-related products and services;
credit-related products;
work-from-home and business opportunities; and
dietary supplements and nutraceuticals.

It also bans the defendants from using:

continuity programs and negative option marketing, in which consumers have to opt out of receiving products to prevent being charged on a recurring basis;
testimonials in connection with any product or service; and
preauthorized electronic fund transfers that charge consumers’ debit accounts.

The court order announced today grants the FTC’s motion for summary judgment against defendants Kyle Kimoto; Michael Henriksen; Steven R. Henriksen; Tasha Jn Paul; Rachel A. Cook; James J. Gray; Randy D. O’Connell; Acai, Inc.; Allclear Communications, Inc.; Consolidated Merchant Solutions, LLC; Dragon Group, Inc.; Elite Benefits, Inc.; Global Fulfillment, Inc.; Global Gold, Inc.; Global Gold Limited; Grant Connect, LLC; Healthy Allure, Inc.; Horizon Holdings, LLC; MSC Online, Inc.; O’Connell Gray, LLC; OS Marketing Group, LLC; Paid To Process, Inc.; Premier Plus Member, Inc.; Total Health, Inc.; and Vcomm, Inc.

Earlier this year, the FTC settled similar charges against several other defendants in the case. Under those settlements, Juliette Kimoto, Johnnie Smith, and four companies Kimoto owned were barred from marketing certain products and services similar to those that they allegedly offered to consumers. The settlements also imposed a $29.8 million judgment against them that was partially suspended.

The FTC appreciates the assistance in this matter of the U.S. Attorney’s Office for the District of Nevada, the Better Business Bureau of Northern Nevada, the Better Business Bureau of Southern Nevada, the Las Vegas Metropolitan Police Department, the Reno Police Department (Financial Crimes/Computer Crimes Department), the U.S. Department of State, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the New Zealand Department of Internal Affairs.

Information for consumers on how to avoid government grant scams can be found on the FTC’s website and as a link to this press release.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics. “Like” the FTC on Facebook and “follow” us on Twitter.

(FTC File No. 092-3126; Civ. No. 2:09-CV-01349)
(Grant Connect.final)

FTC Seeks Public Comment on Universal Health Services’ Application to Sell Las Vegas Psychiatric Facilities

Universal Health Services, Inc. (UHS) is seeking the approval of the Federal Trade Commission to sell its Las Vegas psychiatric facilities, including Montevista Hospital and Red Rock Behavioral Health Hospital, to Strategic Behavioral Health, LLC. UHS is required to sell the assets under an FTC order settling charges that its 2010 acquisition of Psychiatric Solutions, Inc. as originally proposed was anticompetitive.

According to Universal Health’s application, the sale will satisfy the terms of the FTC order. UHS contends that Strategic Behavioral Health has the financial, professional, and operational resources to be a strong and effective competitive force in the Las Vegas, Nevada, market for the provision of acute inpatient psychiatric services.

Universal Health has already received FTC approval to sell assets in Delaware and must still divest assets in Puerto Rico. On June 3, 2011, UHS submitted, but subsequently withdrew, an application to divest the Las Vegas assets to Dr. Soon Kim through Signature Health Services, LLC, which does business as Aurora Behavioral Healthcare.

The Commission is accepting public comments on the application until December 12, 2011, after which it will decide whether to approve the sale. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments also can be filed electronically. Copies of the application also can be found on the FTC’s website and as a link to this press release. (FTC File No. 101-0142, Docket No. C-4309; the staff contact is Elizabeth A. Piotrowski, Bureau of Competition, 202-326-2623; see press release dated November 15, 2010.)

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 601 New Jersey Ave., Room 7117, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook and follow us on Twitter.

(FYI 44.2011.wpd)

FTC-Initiated Case Results in Contempt Order Against ‘Scam Recovery’ Kit Promoters

A federal judge has found a telemarketer and his company in contempt for violating a court order barring them from charging consumers in advance for a service that purportedly would help consumers recover money they lost in previous telemarketing scams. The contempt order stems from an action the FTC initiated in March 2011 as part of a multi-agency law enforcement initiative against scammers who prey upon financially strapped consumers.

The contempt order found that Brian Scott Hessler and Business Recovery Services LLC violated a preliminary injunction issued against them in April by charging an up-front fee for do-it-yourself kits they claimed would help consumers recover money they lost in business opportunity and work-at-home scams. The Department of Justice filed the motion for contempt on the FTC’s behalf.

The contempt order requires the defendants to make refunds to some consumers and gives them 30 days to show that their business practices comply with the court’s preliminary injunction. The court will assess a $1,000 per day fine for every day they fail to certify compliance. For every violation of the injunction that the FTC can prove after the contempt order, the court will assess a $1,000 fine and order refunds to customers.

In its original complaint, the FTC alleged that the defendants violated the Telemarketing Sales Rule by falsely claiming their kits, which cost up to $499, would help consumers recover money they lost to scams. They also accepted advance payments from consumers without waiting seven business days for the consumers to receive the recovered money.

The U.S. District Court for the District of Arizona granted the motion for contempt on October 17, 2011.

Click these links for FTC consumer education about refund and recovery scams, business opportunities, job scams, federal and postal job scams, work-at-home schemes, and envelope-stuffing rip-offs.

(Business Recovery Services)

Operator of Social Networking Website for Kids Settles FTC Charges Site Collected Kids Personal Information Without Parental Consent

The operator of www.skidekids.com, a website that advertises itself as the “Facebook and Myspace for Kids,” has agreed to settle Federal Trade Commission charges that he collected personally information from approximately 5,600 children without obtaining prior parental consent, in violation of the Commission’s Children’s Online Privacy Protection Act (“COPPA”) Rule. The FTC’s complaint also charges the operator, Jones O. Godwin, with making deceptive claims in Skid-e-kids’ privacy policy about the site’s information collection practices. The proposed settlement will bar future violations of COPPA and misrepresentations about the collection, use and disclosure of children’s information.

The FTC’s COPPA Rule requires that website operators notify parents and obtain their consent before they collect, use or disclose personal information from children under 13. The Rule also requires that website operators post a privacy policy that is clear, understandable and complete.

According to the FTC, Skid-e-kids is a social networking site targeted at children ages 7-14 that allows them to register, create and update profile information, create public posts, upload pictures and videos, and “friend” and send messages to other Skid-e-kids members.

The FTC alleges that the Skid-e-kids’ online privacy policy claimed that the site “requires child users to provide a parent’s valid email address in order to register on the website. We use this information to send the parent a message that can be used to activate the Skid-e-kids account, to notify the parent about our privacy practices, to send the parent communications either about the parent’s and child’s Skid-e-kids accounts or about features of our Web site . . .”

The complaint alleges that the defendant registered children on the website without collecting a parent’s email address or obtaining permission for their children to participate. Children who registered were able to provide personal information, including their date of birth, email address, first and last name, and city. In addition to violating the COPPA Rule by collecting kids’ personal information without parental permission, the FTC alleged that the Skid-e-kids’ false privacy policy claims violated the FTC Act.

In addition to barring future violations of COPPA and misrepresentations about the collection and use of children’s information, the settlement order also requires Godwin to destroy information he collected from children in violation of the Rule, and, for a period of time, link to online educational material and retain an online privacy professional or join a Commission-approved safe harbor program to oversee any COPPA-covered website he may run. Finally, the proposed order imposes a $100,000 civil penalty, all but $1,000 of which will be suspended if Godwin provided truthful information about his financial condition and complies with the order’s oversight provision.

The FTC has a new publication, Living Life Online, to help tweens and teens navigate the Net safely.

The Commission vote to authorize the staff to refer the complaint to the Department of Justice was 5-0. The vote to approve the proposed consent decree, was 4-1, with Commissioner J. Thomas Rosch dissenting. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in the U.S. District Court for the Northern District of Georgia on November 8, 2011. The proposed consent decree is subject to court approval.

NOTE: The Commission authorizes the filing of 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. The complaint is not a finding or ruling that the defendants have actually violated the law. This consent decree is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Consent decrees have the force of law when signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook and follow us on Twitter.

Related posts:

Related posts:

Contact Information

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts: