FTC weighs in against BurnLounge
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According to a news report, the U.S. Federal Trade Commission has filed suit against online music promotion company BurnLounge, calling it a "pyramid scheme."
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FTC commissioners have approved a prospective settlement with Sony in the wake of the music company's problematic copy-protection attempts, which included rootkits and phone-home software. Now it's the public's turn to comment on the arrangement.
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(InfoWorld) - Legislation that would allow the U.S. Federal Trade Commission (FTC) to seek civil penalties against businesses that obtain personal data under false pretenses may soon get a vote in the U.S. House of Representatives. The full House could vote on Prevention of Fraudulent Access to Phone Records Act as soon as late Friday or Saturday, Representative Joe Barton, the chairman of the House Energy and Commerce Committee, said Friday. Barton, a Texas Republican, asked the House leadership to move forward with the bill afterÂ lawmakers ripped into Hewlett-Packard Co. (HP) officials ThursdayÂ for allowing the practice during an investigation into board leaks. HP President and Chief Executive Officer Mark Hurd and former HP Chairwoman Patricia Dunn both testified Thursday that they did not know the details of how the leak investigation was conducted. The pretexting legislation has been stalled since the House Energy and Commerce Committee unanimously approved it in March. The bill would allow the FTC to seek civil penalties against so-called pretexters, those who masquerade as a customer to gain access to phone records or other personal information. Representatives of five mobile phone service carriers raised no objections to the bill during Friday's hearing. Lawmakers questioned if more businesses than HP have used pretexting or other questionable investigatory methods. "How do we, and how does corporate America, break this ethos that, if someone thinks that illegal or unethical activity ... is acceptable, everybody else in a corporation goes along with it?" said Representative Diana DeGette, a Colorado Democrat. DeGette will explore ways to add new requirements to the Sarbanes-Oxley financial reporting law, she said. Christopher Bryon, a columnist for the New York Post, told lawmakers Friday that he was a victim of pretexting four years ago, long before the HP investigation came to light. A facial recognition software company hired a pretexter to gain access to his sources after he wrote a column about the company, Bryon said. Pretexting appears to be a widespread practice among U.S. businesses, Bryon said. "This is not something I wanted my family to grow up with ... wondering if your mail is being read, if your phone is tapped, if there's a bug in your bedroom," he said. The FTC has filed five lawsuits against alleged pretexters, but the agency lacks the legal authority to seek civil damages, said Joel Winston, associate director of privacy and identity protection at the FTC. The FTC sought to recover pretexting-related profits in those cases, but additional civil penalties would give the agency an additional tool to use against identity thieves, he said. A second pretexting bill, the Telephone Records and Privacy Protection Act, has passed the House, but the measure is hung up in the Senate over disagreements over the best approach. The House bill would make pretexting a crime, with a penalty of up to 10 years in prison. Congress is scheduled to adjourn by early next week until after the Nov. 7 general election. Congress may come back into session late in the year to address unfinished business.
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The U.S. Federal Trade Commission (FTC) is looking for victims of a data breach at ChoicePoint announced in early 2005.
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The U.S. Federal Trade Commission (FTC)&#160;has settled a complaint with a Web-based company it accused of selling people&#39;s telephone records without permission, the agency said Monday.The settlement with CEO Group, doing business as Check Em Out, bars the company and its operator Scott Joseph from marketing or selling phone records, and it requires the company to give up $25,000 of its profits from selling phone records. Selling phone records to third parties is illegal under federal law, the FTC had charged.The FTC in May 2006 filed complaints in U.S. court against five Web-based companies that obtained and sold confidential phone records to third parties. In addition to the settlement with CEO Group, the FTC has settled two other cases and obtained a default judgment against a fourth company. The complaint against the fifth company is still active.The FTC&#39;s complaints came after complaints from privacy groups and members of the U.S. Congress about pretexting, when someone obtains a telephone customers&#39; records without permission under false pretexts. In many cases, companies offering phone records over the Internet were calling telephone carriers and pretending to be the targeted customer. In September 2006,&#160;Hewlett-Packard revealed it had been spying on some of its board members and journalists in an attempt to uncover the source of boardroom leaks, and HP officials later said their investigators had used pretexting to obtain phone records.The Telecommunications Act of 1996 prohibits customers&#39; phone records from being disclosed unless &quot;upon affirmative written request by the customer.&quot; The FTC charged the five Web-based companies of engaging in unfair business practices.The settlement with CEO Group prohibits it from obtaining, marketing or selling consumer phone records or other consumer personal information except where allowed by law, the FTC said in a news release. The settlement, approved by the U.S. District Court for the Southern District of Florida, includes a judgment of $222,381, the amount the company earned by selling phone records, but the defendants said they were able to pay only $25,000. If the court finds that the defendants misrepresented their finances, the entire amount will be due, the FTC said.
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Nearly lost in the news about the&#160;U.S. Federal Trade Commission&#39;s (FTC) approval on Thursday of Google&#39;s acquisition of DoubleClick&#160;was another action by the agency: The publication of a proposed set of privacy principles governing online behavioral advertising.The release of the privacy principles is an important and welcome step, said Peter Swire, a senior fellow at the Center for American Progress, a liberal think tank, and a law professor at Ohio State University. Although some privacy groups blasted the FTC for approving Google&#39;s DoubleClick deal, the acquisition has helped place focus on the entire online advertising industry&#39;s privacy practices, Swire said.&quot;It&#39;s good that the FTC is shining a spotlight on this industry,&quot; Swire said Friday. &quot;Online advertising is in its second boom. They&#39;re trying lots of new techniques; some of those techniques have privacy problems.&quot;The FTC hosted a workshop on behavioral advertising and privacy in November. The agency&#39;s proposed privacy principles, a series of &quot;self-regulatory&quot; steps the FTC is recommending for online advertisers, come in part from that workshop.Among the FTC&#39;s proposals:-- Web sites that collect information for behavioral advertising should provide a &quot;clear, consumer-friendly, and prominent statement&quot; about the reason for collecting that data. Consumers should be able to choose whether they will allow that information to be collected.-- Any company that collects or stores consumer data for behavioral advertising should provide &quot;reasonable security&quot; and should keep data only as long as necessary to fulfill legitimate business or law enforcement needs.-- Companies should only collect sensitive data for behavioral advertising if they obtain express consent from the consumer.The Center for Democracy and Technology (CDT), a group focused on online privacy and civil liberties, also praised the FTC for releasing its privacy principles. The principles are a &quot;clear sign that the commission does not believe that the industry&#39;s current self-regulation framework is sufficient to protect consumers today,&#8221; CDT Deputy Director Ari Schwartz said in a statement.CDT also called on Google to &quot;step up and make a clear, public statement about its plans for proactively protecting consumer privacy.&quot; Consumer privacy in the behavioral advertising market remains an industrywide concern that requires the focus of consumers, policymakers and companies, CDT said.The release of the privacy principles should send a signal to online advertisers, said Leslie Harris, CDT&#39;s president. &quot;In releasing these principles, the FTC hasn&#39;t closed the door to other options,&quot; she said in a statement. &quot;Self-regulation is part of the solution for protecting consumer privacy, but clearly self-regulation hasn&#39;t lived up to its promises.... We&#39;ll need a rigorous mix of self-regulation backed by regulatory enforcement.&quot;Other privacy groups criticized the FTC for its ruling allowing Google&#39;s acquisition of DoubleClick to move forward. The agency had reason to act on privacy concerns raised by the merger and failed, said Marc Rotenberg, executive director of the Electronic Privacy Information Center (EPIC), one of three privacy groups that asked the FTC to block the merger or impose privacy conditions.The FTC could have established &quot;the necessary safeguards for personal data and competition that could have allowed a global [privacy] framework to emerge,&quot; Rotenberg said. &quot;[The FTC&#39;s] sole purpose is to protect the public interest. It failed to do so ... in a case that will have far-reaching implications for the Internet economy and the privacy rights of American consumers.&quot;Joseph Turow, a communication professor at the University of Pennsylvania, agreed. The European Union is still investigating the Google-DoubleClick deal, with a decision not due until April, and it is likely that regulators there will take a harder look at privacy issues, he said.Consumer tracking and privacy should be part of the FTC&#39;s antitrust review when it looks at online advertising deals, he said. &quot;You can&#39;t talk about the digital advertising market today without talking about competition in targeting Americans,&quot; he said.Google supports the FTC&#39;s efforts to create privacy guidelines, David Drummond, the company&#39;s senior vice president for corporate development and chief legal officer, said in a blog post. &quot;The FTC&#39;s decision publicly affirms what we and numerous independent analysts have been saying for months: Our acquisition does not threaten competition in what is a robust, innovative, and quickly evolving online advertising space,&quot; Drummond wrote. &quot;In fact, we firmly believe the transaction will increase competition and bring substantial benefits to consumers, web publishers, and online advertisers.&quot;Critics failed to show specific privacy harms, added Thomas Lenard, president of iGrowthGlobal, a conservative think tank. &quot;I don&#39;t see a problem because nobody has demonstrated the acquisition will result in any privacy harm to consumers,&quot; he said. &quot;All the allegations are very hypothetical. Privacy advocates assert that Google&#39;s and DoubleClick&#39;s activities injure consumers, but they don&#39;t provide any evidence.&quot;If the FTC had blocked the deal, it would be &quot;penalizing success, and that would send a bad signal to the marketplace,&quot; Lenard added. &quot;That would also be bad for consumers.&quot;
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An online advertiser that drove traffic to its Web sites by sending out spam with misleading subject lines has agreed to settle a U.S. Federal Trade Commission (FTC)&#160;complaint charging that it failed to tell consumers they had to spend money to receive so-called free products, the FTC announced Wednesday.The settlement requires Member Source Media to disclose the costs and obligations associated with the advertised products and services, and bars the company from sending e-mail that violates the CAN-SPAM Act, which regulates the sending of unsolicited e-mail. The company must also pay $200,000 in civil penalties, according to the settlement approved Wednesday in the U.S. District Court for the Northern District of California.Member Source Media -- doing business as ConsumerGain.com, PremiumPerks.com, FreeRetailRewards.com, and GreatAmericanGiveaways.com -- and the company&#8217;s owner, Chris Sommer, used deceptive spam and online advertising to lure customers to its Web sites, the FTC alleged.The company used e-mail subject lines such as, &quot;Congratulations. You&#39;ve won an iPod Video Player,&quot; &quot;Here are 2 free iPod Nanos for You: confirm now,&quot; and &quot;Second Attempt: Target Gift Card Inside,&quot; the FTC said in a press release. The company&#39;s Web-based ads contained similar offers: &quot;CONGRATULATIONS! You Have Been Chosen To Receive a FREE GATEWAY LAPTOP.&quot;When consumers arrived at Member Source Media&#39;s Web pages, they were led through a series of ads for goods and services from third parties.To qualify for their &quot;free products,&quot; consumers would have to first wade through pages of &quot;optional&quot; offers. Once they navigated those pages, they had to participate in a series of third-party promotions requiring them to do things such as purchase products, subscribe to satellite television service, or apply for multiple credit cards, the FTC said.Member Source Media&#39;s failure to disclose material facts was deceptive and violated the FTC Act, the FTC said. In addition, the agency charged that deceptive subject lines in Member Source Media&#39;s spam e-mails violated the federal CAN-SPAM Act.The settlement requires that Member Source Media clearly disclose in its ads and on its Web pages that consumers have to spend money or incur other obligations to qualify for a free product or service. The settlement also requires the company to provide a list of the obligations a consumer is likely to incur to qualify for their chosen item -- such as applying for credit cards or purchasing products.
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Raising the fine line US consumer watchdog the Federal Trade Commission (FTC) is calling for a bigger stick with which to punish spyware purveyors.â¦
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(InfoWorld) - The U.S. Federal Trade Commission has asked a federal court to make two Florida companies stop telephone pretexting and to pay back victims of the practice. One of the companies, Action Research Group, has been linked in press reports to last year'sÂ Hewlett-Packard pretexting scandal, which led to theÂ resignation of HP Chairman Patricia DunnÂ last September. The second company, Eye in the Sky Investigations, has "performed services" for Action Research Group, the complaint said. Eye in the Sky also was called to testify before a congressional investigation into the matter. In a complaint filed Wednesday in U.S. District Court in Orlando, the FTC claims that the practice of pretexting violates the U.S. Telecommunications Act of 1996. Telephone pretexting is illegal in some states, but Thursday's complaint seeks to clarify where the FTC stands on the practice. "Selling the records constitutes an invasion of privacy that could endanger the health and safety of consumers," the FTC said in a statement released Thursday. It is also a violation of federal law, the statement says. HP's top executives became embroiled in a pretexting scandal late last year. While trying to clamp down on a boardroom leak dating back to 2005, HP hired private investigators who obtained telephone records of company employees and journalists by falsely representing themselves as account holders or telephone company employees. The scandal at HP also led to the resignation of Ann Baskins, formerly HP's senior vice president and general counsel, and Kevin Hunsaker, the company's senior legal counsel. On Thursday, an HP spokesman said he welcomed the FTC's move. "HP is opposed to pretexting and has expressly called for the practice to be made illegal," said HP's Ryan Donovan. "We support the FTC's efforts to permanently halt telephone record pretexting." All five FTC commissioners voted to authorize the complaint, the FTC said.
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A U.S. court in Wyoming has ordered a Web-based information broker to stop selling telephone records without owners&#39; consent and to turn over nearly $200,000 in profits from the operation, the U.S. Federal Trade Commission announced Monday.AccuSearch, doing business as Abika.com, and owner Jay Patel used &quot;false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations&quot; to induce telecom carriers to disclose the confidential records, the FTC said in a news release.Judge William Downes of the U.S. District Court for the District of Wyoming ordered the company to stop selling telephone records in a Dec. 20 decision announced Monday. The judge also ordered the company, based in Cheyenne, Wyoming, to turn over information so that the FTC can notify the people whose telephone records were sold.Abika.com advertised that it could obtain the confidential phone records of any individual -- including details about outgoing and incoming calls -- and make that information available to customers for a fee, the FTC said in a May 2006 complaint. The FTC charged that the company&#39;s methods of obtaining phone records, including posing as a customer of a telecom carrier, violated the FTC Act, which bars unfair business practices.A representative of Abika.com didn&#39;t immediately respond to a request for comment. The company continues to sell such information&#160;as criminal, tax, mortgage, and driving records through its Web site.The defendants have appealed the order to the U.S. Tenth Circuit Court of Appeals.Downes found that the company&#39;s ways of obtaining phone records without consumers&#39; consent was &quot;necessarily accomplished through illegal means,&quot; and that defendants knew that the phone records were being obtained surreptitiously.The company&#39;s actions caused major problems to consumers, including serious health and safety risks experienced by some consumers from stalkers and abusers; economic harm associated with changing telephone carriers and upgrading security on their accounts; and a host of &quot;substantial and real&quot; emotional harms, the judge said.Consumers had no way to avoid these harms, he wrote. &quot;In fact, the evidence presented before the court indicates that confidential consumer phone records were sold through Abika.com despite considerable efforts by consumers to maintain the privacy of those records,&quot; the judge wrote.Finally, the court found no countervailing benefits to consumers or competition that could be derived from the defendants&#39; practice.Downes also rejected the defendants&#39; claimed immunity under the Communications Decency Act, a federal statute that confers immunity on interactive computer service providers for publishing information content provided by a third party. The judge found that the argument failed partly because the defendants participated in creating the content they sought to have immune from prosecution, the FTC said.
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In an historic decision that split the FTC almost down the middle, it has issued a complaint against a patent holding company allegedly that apparently sued computer and network manufacturers for having followed the Ethernet standard.
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Legislation that would allow the U.S. Federal Trade Commission (FTC) to seek civil penalties against businesses that obtain personal data under false pretenses may soon get a vote in the U.S. House of Representatives.
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A company that sells Internet domain names is facing criticisms for holding some in reserve as a consumer-protection measure, a move that also prevents interested parties from shopping around for better prices.
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Insurance Commissioner Nonnie S. Burnes has promised to keep a tight regulatory rein on automobile insurers as competition is introduced next year, but several state senators said yesterday they weren't content to rely on the commissioner's assurances.
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FTC is mailing forms to consumers who believe they were victims of identity theft.
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Two privacy groups are stepping up the pressure on the U.S. Federal Trade Commission (FTC), saying the agency has an obligation to consider privacy concerns as it prepares to rule on the antitrust implications of&#160;Google&#39;s proposed acquisition of DoubleClick.
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The US Federal Trade Commission last week filed a legal complaint against two companies that allegedly infected computers with spyware and pop-up advertising, then tried to sell their owners spyware-blocking software.