App Developer Settles New Jersey Privacy Probe

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By Leslie A. Pappas

Sept. 11 — A mobile application developer that helps car dealerships market their vehicles to potential customers has agreed to broaden its privacy policy disclosures under a Sept. 8 consent order with the New Jersey Division of Consumer Affairs, the New Jersey Office of the Attorney General announced Sept. 9.

DealerApp Vantage LLC, a Piscataway, N.J.-based app developer, agreed to pay $48,724.33, of which $38,000 was a civil penalty and the rest reimbursement of the division's attorneys' fees and costs of investigation, according to the consent order. Part of that amount will be suspended based on the company's compliance with the order.

“Online consumers, like all other consumers, have the right to control who can view or transmit their sensitive and private personal information,” Acting Attorney General John J. Hoffman (R) said in his office's statement. “This settlement will assure that the alleged violations of consumer privacy committed by DealerApp will no longer occur and will send a message to companies that violate their customers’ privacy that such conduct is unacceptable.”

DealerApp cooperated with the investigation and “made a business decision to settle the case,” the company's attorney, Jack A. Traina of Traina & Traina in Wood-Ridge, N.J., told Bloomberg BNA Sept. 11.

“They don't believe they've violated any law,” Traina said, adding that the company is in the business providing a service, not selling consumer information. “The state wanted them to broaden the disclosures, and that's it.”

Auto Dealership Apps

DealerApp develops custom apps for several hundred auto dealerships across the country, according to the company's website. According to the attorney general's statement, about 500 auto dealerships worldwide use DealerApp to market vehicles to potential customers, including 38 dealers in New Jersey.

The state alleged that DealerApp violated the New Jersey Consumer Fraud Act by collecting personal information from consumers and transmitting it both to DealerApp, and in some cases third-party data analytics companies, without telling app users or the dealerships.

The data included consumers' names, e-mails, telephone numbers and vehicle identification numbers of cars they bought, the state said.

Settlement Terms

According to the consent order, DealerApp agreed that within 21 days it would more clearly disclose its privacy policies and also disclose how third-party analytics companies might use consumer data. The company agreed not to sell, rent or transfer personal information to any company other than the dealership without proper disclosures and without obtaining consumer consent. The company also agreed to offer the consumer the ability to opt out of such data transfers.

Based on DealerApp's compliance and “candor,” the division agreed to suspend $26,224.33 of the $48,724.33 that the company agreed to pay. The division will automatically vacate the suspended amount after two years, provided the company makes the remaining settlement payments according to a payment plan and fully complies with the consent order.

The Office of the Attorney General represented the state.

To contact the reporter on this story: Leslie A. Pappas in Philadelphia at lpappas@bna.com

To contact the editor responsible for this story: Katie W. Johnson at kjohnson@bna.com

 

The consent order is available at http://nj.gov/oag/newsreleases15/DealerApp-Vantage_Redacted.pdf.