Companies that collected extensive personal information from millions of high school students claiming that they would share the information only with colleges, universities, and others providing education-related services, then also sold the information to commercial marketers, have agreed to settle Federal Trade Commission charges that their practices violated federal law. The proposed consent agreements bar the respondents from using previously collected student information for non-educational-related marketing purposes; bar them from using data collected in the future for non-educational-related marketing purposes unless they disclose how the data actually will be used; and bar further deceptive statements.
The settlements name National Research Center for College and University Admissions (NRCCUA), and its principal, Don M. Munce, based in Lee's Summit, Missouri, and American Student List (ASL), a New York corporation based in Mineola, New York as respondents.
According to the FTC complaint detailing the charges, NRCCUA, Munce, and ASL distributed surveys to high school teachers and guidance counselors with the request that they have their students complete the survey in school. The survey collected such information as name, address, gender, grade point average, date of birth, academic, and occupational interests, athletic and extracurricular interests, racial and ethnic background, and religious affiliation. Materials provided to educators with the survey claimed that the service "is completely funded" by 850 college and university members, and that "NRCCUA is funded by its member colleges and universities for the purpose of distributing helpful educationally-related literature to students." The materials also claimed that the colleges and universities "use the NRCCUA survey to contact . . . students whose interests and abilities match the institution's offerings. By completing this survey now, your students will receive the information they need to help them make an informed college choice." The privacy statement on the survey claimed that students' data "is used by colleges, universities and other organizations to assist students and their families by providing them with valuable information."
The FTC alleges that the survey's privacy statement and marketing materials represent that the respondents will share the information they collect only with colleges, universities, and other entities providing education-related services and that the survey is funded solely by educational institutions. In fact, the respondents not only provided the information to colleges and universities, but also sold the information to commercial marketers. In addition, the survey is not funded solely by educational institutions, but also receives substantial funding from ASL and other commercial entities.
The proposed consent agreements, announced today for public comment, bar disclosure of the information the respondents previously collected for any non-educational related marketing purpose. The agreements further bar misrepresentations about how personally identifiable information is collected or will be used or disclosed, and bar misrepresentations about how the collection of personally identifiable information is funded. The agreements also bar the respondents from disclosing personal identifiable information about students for non-educational-related marketing purposes, unless they disclose the existence and nature of the marketing purpose and the types or categories of any entities to which the information will be disclosed. Finally, the agreements contain record-keeping provisions to allow the FTC to monitor compliance with the order.
The Commission vote to accept the proposed administrative consent agreements and place them on the public record was 5-0. Summaries of the proposed consent agreements will be published in the Federal Register shortly. They will be subject to public comment for 30 days, until October 31, 2002, after which the Commission will decide whether to make them final. Comments should be addressed to the Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaint and consent agreement are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.