The Secure Times

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

ControlScan, a Privacy and Security Certification Service and its Founder Settle with FTC

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On February 25, 2010, the FTC announced two separate settlements.  One is a Stipulated Final Judgment and Order to settle a complaint, without trial, filed in the U.S. District Court, Northern District of Georgia.  This settlement is with ControlScan, a company that provides privacy and data security certification to online retailers and other Web sites.  Based on the same facts, Richard Stanton, the founder and former chief executive officer of ControlScan also agreed to settle charges pursued by the FTC at the Federal Trade Commission.  The FTC charged that ControlScan misled consumers about how often ControlScan monitored the sites and the steps it took to verify the privacy and security practices of the sites that had ControlScan certificates. The settlements bars future misrepresentations. Mr. Stanton’s settlement requires him to give up $102,000 in "ill-gotten gains". The Stipulated Final Judgment and Order specifies that the complaint which it settles states a claim upon which relief may be granted against ControlScan under Sections 5(a)(1) and 13(b) of the FTC Act.  A judgment against ControlScan of $750,000 is suspended, based on ControlScan’s inability to pay, but if the court finds that ControlScan misrepresented its financial condition, the entire amount will be payable immediately, less any amounts paid by Stanton.

More information can be found at http://www.ftc.gov/opa/2010/02/controlscan.shtm.

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Author: ABA Antitrust

Learn more about the ABA Section of Antitrust Law: http://ambar.org/antitrust

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