The company has agreed to pay $200,000 to settle Federal Trade Commission allegations that it deceived consumers about its recertification program.
The trustworthiness of TRUSTe, a respected Internet privacy company, has taken a blow.
According to the Federal Trade Commission, TRUSTe, whose full name is True Ultimate Standards Everywhere Inc., provided its seal of approval for many commercial websites and mobile apps without verifying through annual reviews that they still met the privacy standards necessary to safeguard customers’ data.
“The TRUSTe symbol has become the equivalent of an Underwriters Laboratories safety seal or a Good Housekeeping seal of approval, signaling to consumers that a website follows privacy practices like the Children’s Online Privacy Protection Act and the United States-European Union Safe Harbor Framework,” The New York Times said.
The FTC said that between 2006 and 2013, TRUSTe failed to conduct annual reviews recertifying the privacy practices of companies in more than 1,000 instances, “despite providing information on its website that companies holding TRUSTe Certified Privacy Seals receive recertification every year.” FTC chairwoman Edith Ramirez said in a statement:
TRUSTe promised to hold companies accountable for protecting consumer privacy, but it fell short of that pledge. Self-regulation plays an important role in helping to protect consumers. But when companies fail to live up to their promises to consumers, the FTC will not hesitate to take action.
According to The Associated Press, TRUSTe agreed to pony up $200,000 to settle the FTC allegations, but it didn’t admit any wrongdoing. AP wrote:
In a company blog post, CEO Chris Babel said TRUSTe regrets not living up to “our own standards” but characterized the problems as isolated. He said the company conducted compliance reviews in a majority of cases.
You can read the entire blog post here.
The FTC said TRUSTe, which began operating in 1997, also allowed itself to be misrepresented as a nonprofit entity even though it became a for-profit business in 2008. According to the AP, Babel said TRUSTe will not recertify the privacy standards of companies until they remove references to TRUSTe’s former nonprofit status.