The Secure Times

An online forum of the ABA Section of Antitrust Law's Privacy and Information Security Committee

What can my company learn from the FTC’s recent enforcement activity in the lead generation industry, and resulting $2.9M settlement?

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If your company is in the lead generation business, or if your company retains lead generators to send consumer business its way, then there are several lessons to be learned from the FTC’s recent $2.9M settlement with ValueClick, Inc., Hi-Speed Media, Inc., and E-Babylon.
  • Make sure that advertisements comply with the FTC’s requirements for the use of the word “free.” In this action, the defendants used the word “free” to describe merchandise rewards when, in fact, consumers were required to pay for other products in order to be eligible for the free merchandise.
  • When e-mail is involved, the same deceptive marketing can lead to two separate causes of action, both under the Federal Trade Commission Act and the CAN-SPAM Act. These defendants used the word “free” improperly in the subject line of their e-mails, leading to the FTC’s allegation that they violated the CAN-SPAM Act’s rule against deceptive subject lines.
  • Don’t make promises about data security in your privacy policy, unless your data security practices are truly up to industry standards. These defendants promised to encrypt sensitive consumer data, and they did so. But the specific encryption technology they used did not meet the FTC’s standards.
  • Make sure your web site is not vulnerable to “SQL injection attacks,” which hackers can use to obtain access to sensitive information (such as payment card data) housed in databases that run behind the site. The FTC has repeatedly taken action against companies whose web sites are vulnerable to this type of attack, which are commonly known and can be easily averted.

Author: ABA Antitrust

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