TRUSTe settles FTC charges of deceit for Privacy Seal program

TRUSTe, Inc., one of the largest providers of privacy certifications for online businesses, has agreed to settle a Federal Trade Commission suit alleging that they deceived consumers about their recertification program for privacy practices on websites. TRUSTe was also charged with deceiving the public about its non-profit status.

The Privacy Seal program was meant to assure consumers that a business’ privacy practices were in compliance with specific standards such as the Children’s Online Privacy Protection Act (COPPA) and the U.S.-E.U. Safe Harbor Framework. The FTC alleged that TRUSTe did not conduct annual recertifications of companies holding certification from 2006-2013, despite saying that those with recertifications had undergone those tests.

The FTC also says that TRUSTe became a for-profit corporation in 2008, but has not required companies using its certifications or referencing it to update that information to remove the non-profit status claim.

The FTC asked a federal judge to order TRUSTe to maintain a higher standard of consumer protection and cease making misrepresentations about its certification processes or timeline as well as its corporate profit model.

“The settlement also requires the company in its role as a COPPA safe harbor to provide detailed information about its COPPA-related activities in its annual filing to the FTC,” says the FTC’s release, “as well as maintaining comprehensive records about its COPPA safe harbor activities for ten years. Each of these provisions represents an increase in the reporting requirements laid out under the COPPA rule for safe harbor programs. The company must also pay $200,000 as part of the settlement.”

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