FTC settlement with two companies accused of misleading consumers over Safe Harbor certification. - DAC Beachcroft

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FTC settlement with two companies accused of misleading consumers over Safe Harbor certification.

Published 7 May 2015

Two companies, TES Franchising LLC, and American International Mailing, Inc., facing allegations brought by the United States' Federal Trade Commission (FTC) that they were falsely claiming Safe Harbor certification have agreed a settlement with the FTC. 

Both companies were claiming on their websites that they were certified with the Safe Harbor scheme, when in fact their certifications had lapsed and had not been renewed a number of years previously.

Under the proposed settlement agreements, 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. The complaint against TES alleged that TES deceived consumers about the nature of its dispute resolution procedures. On its website, the company stated that Safe Harbor-related disputes would be settled by an arbitration agency, would take place in Connecticut, and costs would be split between the consumer and the company. However TES's original Safe Harbor filing said it would resolve disputes through the European data protection authorities, which do not require in-person hearings and resolve disputes at no cost to the consumer. The settlement with TES therefore further prohibits the company from misrepresenting its participation in or the terms of any alternative dispute resolution process or service.

We have reported on European criticism targeted at the lack of enforcement of the US Safe Harbor scheme in many previous alerts. This action by the FTC is a further example of the FTC seeking to win back some confidence and credibility in the regime.

To view the FTC press release, please click here.

Authors

Hans Allnutt

Hans Allnutt

London - Minster Court

+44 (0) 20 7894 6925

Rhiannon Webster

Rhiannon Webster

London - Minster Court

+44 (0)20 7894 6577

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