FTC Finds Talent Company Violated Children’s Online Privacy

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By George Lynch

An internet-based talent search company Feb. 5 agreed to pay $235,000 to settle FTC charges that it failed to obtain parental consent before collecting children’s data.

Nevada-based Prime Sites Inc., which conducts business as Explore Talent, would pay the fine to the Federal Trade Commission without admitting fault in the settlement. The FTC barred the company from violating federal child privacy laws and misrepresenting security and privacy practices in their children’s data collection-and-storage practices.

The settlement also covered FTC allegations that Explore Talent, a site that lists auditions and casting calls, misled consumers about the benefits of its paid premium services.

From 2014 to 2016, Explore Talent allegedly collected the information of over 100,000 children under the age of 13 and didn’t disclose to parents or the public how it collects, uses, and discloses data, the FTC complaint said. The company falsely stated in its privacy policy that it didn’t knowingly collect data for children under 13 years of age, and that all accounts had to be created by a legal guardian, according to the FTC. It never took steps to verify whether legal guardians were creating the accounts, according to the complaint.

The website collected personal information, including names, email addresses, telephone numbers, and mailing addresses, when accounts were created. The Children’s Online Privacy Protection Act (COPPA) requires companies collecting information on children under 13 to take steps such as informing parents how the data is used and seeking verifiable parental consent.

Explore Talent “failed to adhere to the safeguards required by law,” Maureen K. Ohlhausen, acting FTC chairman, said in a statement. “Today’s settlement provides strong relief for consumers and will help ensure children are protected going forward.”

The FTC asserted claims under the COPPA and Section 5 of the FTC Act in its complaint, which was filed in the U.S. District Court for the District of Nevada.

To contact the reporter on this story: George Lynch in Washington at glynch@bloomberglaw.com

To contact the editor responsible for this story: Donald Aplin at daplin@bloomberglaw.com

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