Firm Settles Web Child-Privacy Case
May. 06, 1999
WASHINGTON (AP) _ The operator of a ``Young Investor'' Web site has settled government charges that it collected personal information from children without parental consent.
The Federal Trade Commission said Thursday that Liberty Financial Companies Inc. deceived visitors to its site by saying that personal information from an Internet survey, including details of the child's and family's finances, would be kept anonymous.
But according to the commission, the company _ which runs the Young Investor site _ also asked children for personal information such as name, address, age and e-mail address in order to send them newsletters and make them eligible for prizes.
The company, therefore, had identifying information and did not keep the details received from the survey anonymously, the FTC alleged.
Liberty Financial, based in Boston, denied that it made use of the information from the survey.
``At no time did our company ever compromise child privacy,'' said Hal Thayer, a spokesman for Liberty Financial. ``We never used the information for our purposes, nor have we shared such information with any other entity.''
Under the proposed agreement, Liberty Financial would be barred from misrepresenting its collection or use of personal information such as name, address, telephone number and e-mail address obtained from children under the age of 18.
It would also be required to post a privacy notice on its children's sites and obtain verifiable parental consent before collecting personal identifying information from children under 13.
Thayer said that because of increasing concerns about privacy, Liberty Financial has stopped collecting identifying information from its site.
According to the commission, the site included a ``Measure Up Survey,'' where children could answer questions on such subjects as their weekly allowance; whether they received financial gifts like stocks, bonds and mutual funds; and family finances.
The survey expressly stated at the top that all answers would be anonymous, the FTC said. But it included questions for children to become eligible for prizes and to receive newsletters. The commission said the prizes and contests were used to appeal to children, but the company never actually selected winners for the prizes or sent out the newsletters.
Thayer called this an administrative error and said prize winners have collected their rewards. The newsletter has now been incorporated into the Web site itself, he said.
The commission said the order followed the requirements established by the Children's Online Privacy Protection Act, passed by Congress last year.