Federal Trade Commission

Mobile Cramming: A Federal Trade Commission Staff Report suggests five best practices for the payment option known as “carrier billing.”

• Consider giving consumers the option to block third-party charges.
• Honor long-standing truth-in-advertising principle.
• Charges shouldn’t be placed on consumers’ bills unless they’ve given their express, informed consent.
• Charges for third-party services should be clearly shown on consumers’ bills.
• Carriers should set up effective ways for consumers to dispute charges.

The Federal Trade Commission accused T-Mobile of making hundreds of millions of dollars by charging mobile phone customers for "premium" SMS subscriptions that, in many cases, the consumers never authorized.

It was an all-too-common occurrence. People’s mobile phone bills included unexplained -- and unauthorized -- monthly charges. It’s called cramming and the Federal Trade Commission has brought a series of cases against companies that had fees for ringtones, horoscopes, “love tips,” etc., placed on cell phone bills without consumers’ consent. The crammers took a chunk of the cash, but you might be surprised to learn who the FTC says pocketed a 35-40% piece of the action.

A just-filed lawsuit pulls back the curtain on the role the FTC alleges that mobile phone carrier T-Mobile USA played in deceptive and unfair billing. Furthermore, according to the complaint, T-Mobile didn’t respond well to consumer complaints. In many cases, the company flat-out refused to give refunds for unauthorized charges or offered only partial refunds.

Count I of the lawsuit alleges that T-Mobile violated Section 5 of the FTC Act by making deceptive representations about charges on consumers’ phone bills. Count II focuses on allegedly unfair billing practices. What's the FTC asking for? A court order to prevent T-Mobile from engaging in mobile cramming, refunds for consumers, and disgorgement of T-Mobile’s ill-gotten gains.

After a public comment period, the Federal Trade Commission has approved final orders that settle charges against 14 companies for falsely claiming to participate in the international privacy framework known as the US-EU Safe Harbor.

Three of the companies were also charged with similar violations related to the US-Swiss Safe Harbor.

The FTC previously announced the settlements in January, February and May of 2014 with the following companies: American Apparel, Apperian, Atlanta Falcons Football Club, Baker Tilly Virchow Krause, BitTorrent, Charles River Laboratories International, DataMotion, DDC Laboratories, Fantage, Level 3 Communications, PDB Sports, d/b/a Denver Broncos Football Club, Reynolds Consumer Products, Receivable Management Services Corporation, and Tennessee Football.

Under the settlements, the companies are prohibited from misrepresenting the extent to which they participate in any privacy or data security program sponsored by the government or any other self-regulatory or standard-setting organization.

Snapchat, the developer of a popular mobile messaging app, has agreed to settle Federal Trade Commission charges that it deceived consumers with promises about the disappearing nature of messages sent through the service.

The FTC case also alleged that the company deceived consumers over the amount of personal data it collected and the security measures taken to protect that data from misuse and unauthorized disclosure. In fact, the case alleges, Snapchat’s failure to secure its Find Friends feature resulted in a security breach that enabled attackers to compile a database of 4.6 million Snapchat usernames and phone numbers.

According to the FTC’s complaint, Snapchat made multiple misrepresentations to consumers about its product that stood in stark contrast to how the app actually worked. “If a company markets privacy and security as key selling points in pitching its service to consumers, it is critical that it keep those promises,” said FTC Chairwoman Edith Ramirez. “Any company that makes misrepresentations to consumers about its privacy and security practices risks FTC action.”

Touting the “ephemeral” nature of “snaps,” the term used to describe photo and video messages sent via the app, Snapchat marketed the app’s central feature as the user’s ability to send snaps that would “disappear forever" after the sender-designated time period expired. Despite Snapchat’s claims, the complaint describes several simple ways that recipients could save snaps indefinitely.

The complaint also alleges that Snapchat collected iOS users’ contacts information from their address books without notice or consent.

Finally, the FTC alleges that despite the company’s claims about taking reasonable security steps, Snapchat failed to secure its “Find Friends” feature.

The Federal Trade Commission would like to hear your health questions -- your questions about consumer generated and controlled health data, that is.

That’s the topic of an FTC seminar on May 7, 2014, and you’re invited to participate. The seminar -- part of the FTC’s spring privacy series – will examine how consumers are taking a more active role in managing and generating their own health data through websites, devices, apps, etc. What are the potential benefits and privacy implications of these new technologies?

Federal Trade Commission Chairwoman Edith Ramirez welcomed Terrell McSweeny as she began her official duties as an FTC Commissioner.

President Barack Obama named McSweeny to a term that ends on September 25, 2017. She was confirmed by a 95-1 vote in the US Senate on April 9, 2014.

Before joining the FTC, McSweeny served as Chief Counsel for Competition Policy and Intergovernmental Relations for the US Department of Justice Antitrust Division. She joined the Antitrust Division after serving as Deputy Assistant to the President and Domestic Policy Advisor to the Vice President from January 2009 until February 2012, advising President Obama and Vice President Biden on policy in a variety of areas, including health care, innovation, intellectual property, energy, education, women’s rights, criminal justice and domestic violence.

McSweeny’s government service also includes her work as Senator Joe Biden’s Deputy Chief of Staff and Policy Director in the US Senate, where she managed domestic and economic policy development and legislative initiatives, and as Counsel on the Senate Judiciary Committee, where she worked on issues such as criminal justice, innovation, women's rights, domestic violence, judicial nominations and immigration and civil rights. She also worked as an attorney at O'Melveny & Myers LLP. Commissioner McSweeny is a graduate of Harvard University and Georgetown University Law School.

Educators, administrators, and parents have been asking an important question: How do the protections of the Children’s Online Privacy Protection Act (COPPA) and the accompanying Federal Trade Commission rule apply in the school setting?

FTC staff has responded by updating Complying with COPPA: Frequently Asked Questions to address some of the issues that arise when COPPA goes to school.

The new FAQs cover key compliance topics and offer guidance on best practices.

Whether it’s a website where people diagnosed with the same medical condition can share their stories or an app to find out how long it will take in the gym to burn off a Macadamia Mania Ripple sundae, consumers are taking their health in their own hands -- and generating a massive amount of digital data in the process.

Consumers are tracking their diet, exercise, medications, and symptoms online and even downloading their medical records and family histories into apps and websites. Many of these products and services help to empower consumers to be healthier, but what happens to all that data? Who has access to the information and what are they doing with it?

Those are just some of the issues on the agenda as the FTC continues its Spring Privacy Series on May 7, 2014, with a seminar on Consumer Generated and Controlled Health Data. We’re bringing together industry experts, consumer advocates, technologists, and researchers to talk over topics like:

• What types of sites, products, and services are consumers using to generate and control their health data? What benefits can they offer people?
• Are companies sharing the consumer information they collect? If so, with whom and for what purposes?
• What actions are companies taking to protect consumers’ privacy and security?
• What do consumers expect from these companies about privacy and security protections?

The director of the Federal Trade Commission’s Bureau of Consumer Protection notified Facebook and WhatsApp about their obligations to protect the privacy of their users in light of Facebook’s proposed acquisition of WhatsApp.

In a letter to the two companies, Bureau Director Jessica Rich noted that WhatsApp has made clear privacy promises to consumers, and that both companies have told consumers that after any acquisition, WhatsApp will continue its current privacy practices.

“We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers. Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and, potentially, the FTC’s order against Facebook,” the letter states.

In 2011, Facebook settled FTC charges that it deceived consumers by failing to keep its privacy promises. Under the terms of the FTC’s order against the company, it must get consumers’ affirmative consent before making changes that override their privacy settings, among other requirements.

The letter notes that before making any material changes to how they use data already collected from WhatsApp subscribers, the companies must get affirmative consent. In addition, the letter notes that the companies must not misrepresent the extent to which they maintain the privacy or security of user data. The letter also recommends that consumers be given the opportunity to opt out of any future changes to how newly-collected data is used.

The release of the Federal Trade Commission’s fourth major study on the alcohol industry offers a wealth of empirical data for your consideration. Based on information submitted by 14 companies in response to FTC Special Orders, the study focuses on alcohol advertising and industry efforts to reduce marketing to underage audiences. The report also offered a series of recommendations for the industry. Here are just a few:

• When placement compliance levels fall below 90% due to fluctuations in the make-up of the audience, companies should consider using a higher audience composition threshold.
• Demographics for radio audiences used to measure only 12 and older, but now go as low as 6. Companies should use this more comprehensive data when making placements.
• Companies should take advantage of age-gating technologies offered by social media, including YouTube. Age gates on company websites should require the entry of a birthdate and not just a certification that the visitor is over 21.
• For user-generated content, companies should watch what’s going on and use blocking content to reduce the potential for violations of industry advertising and marketing codes.
• State regulatory authorities, consumer groups, and others concerned about alcohol marketing should participate in the industry’s external complaint review system.
• Those concerned about underage drinking should use free “We Don’t Serve Teens” educational materials available at DontServeTeens.gov.