By: Linda L. Goodman
TRUSTe’s Certified Privacy Seals are littered on websites throughout the internet. TRUSTEe claims in advertisements that it is “the #1 privacy brand,” and says its Certified Privacy Seal is “recognized globally by consumers, businesses, and regulators as demonstrating privacy best practices.” TRUSTe further claims that to display the TRUSTe icon, sites must meet requirements about the transparency and verification of their privacy practices, as well as consumer choice about how personal information is collected and used. Finally, they claim to use a variety of tools to test and verify compliance.
The FTC, however, did not agree and brought a complaint alleging TRUSTe violated Section 5 of the FTC Act – deceptive advertising. The complaint charges that TRUSTe’s claim that “Participant shall undergo recertification to verify ongoing compliance with these Program Requirements annually,” was not true citing that TRUSTe didn’t conduct any kind of recertification in more than 1,000 instances between 2006 and January 2013.
In addition, the complaint alleged that the representation that TRUSTe is a “non-profit” organization on many of the seals and in many of the privacy policies certified by TRUSTe was not true. In fact, its non-profit status was so important to TRUSTe that it provided sites bearings its logo with model language to use in their privacy policies: “TRUSTe is an independent, non-profit organization whose mission is to build users’ trust and confidence in the Internet by promoting the use of fair information practices.” Although they started as a non-profit, by the time money really started rolling in around 2008, TRUSTe became a “for-profit” company. Unfortunately, it never removed the claims of “non-profit.” The complaint charged that by originally mandating that language and then recertifying sites since 2008 that conveyed that now-false statement, TRUSTe provided those sites with the “means and instrumentalities” to deceive consumers. After all, could a for-profit corporation be as independent to build users’ trust and confidence?
The allegations aside, the settlement focused almost exclusively on TRUSTe’s status as a COPPA safe harbor. TRUSTe was required to cease a broad range of misrepresentations regarding its certification (and recertification) practices, corporate status, and independence. The order also imposed a $200,000 fine for disgorgement of revenue and 10 years of additional reporting requirements to the FTC about TRUSTe’s COPPA safe harbor, which the FTC approved in 2001.
What’s the message for other companies? Seals and certifications are persuasive to consumers, especially for credence claims. So it’s important that representations conveyed by those marks are truthful. And if something changes – the seal and certificate must change as well. This is especially true for entities that tout their own trustworthiness in certifying the practices of others.
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This article is a publication of The Goodman Law Firm and is intended to provide information on recent legal developments. This article does not create an attorney-client relationship, nor should it be construed as legal advice or an opinion on specific situations. This may constitute “Attorney Advertising” under the Rules of Professional Conduct and under the law of other jurisdictions.
Linda L. Goodman is the founder of The Goodman Law Firm, concentrating its practice in internet business and law. Her firm’s clients include Advertisers, Affiliates, Affiliate Networks, and ISP’s.
© 2014 TGLF, A.P.C.