Privacy Law Blog : Privacy Lawyers & Attorneys : Proskauer Rose Law Firm : CAN-SPAM, FCRA, FACTA

On April 21, 2011, the Federal Trade Commission (FTC) and Electronic Mobility Corporation (d/b/a Rascal Scooters) entered into a settlement agreement pursuant to which Rascal Scooters agreed to pay $100,000 as a civil penalty to settle a complaint filed by the FTC alleging that Rascal Scooters violated the FTC Act (15 U.S.C. § 44) and the FTC’s Telemarketing Sales Rule (16 C.F.R. 310) (TSR). At the center of the FTC’s complaint was the allegation that Rascal Scooters and its owner, Michael Flowers, made more than three million unsolicited sales calls since 2003 to consumers on the Do Not Call Registry who submitted their contact information to Rascal Scooters through its “Win a Free Rascal” sweepstakes.

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Where others have failed, Alan Claridge did not. Recently, a Federal judge in the Northern District of California declined to dismiss Plaintiff Claridge’s claims arising from a data breach involving the social entertainment site RockYou. Arguing that the data breach harmed the value of his personal information, Plaintiff convinced the court not to dismiss his action for lack of standing.

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Google recently settled charges by the Federal Trade Commission (FTC) that Google’s social networking service, Buzz, violated the FTC Act.  The FTC-Google settlement prohibits Google from misrepresenting the extent to which it maintains and protects the confidentiality of users’ information and from misrepresenting its compliance with the US-EU Safe Harbor Framework.  In that regard, the settlement represents two important “firsts” in FTC enforcement:

• The first time a comprehensive privacy program (as opposed to a comprehensive security program) was required by an FTC consent decree.
• The first time the FTC has enforced the US-EU Safe Harbor Principles for substantive non-compliance.

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On April 7, 2011, the SEC announced that it had imposed fines of $20,000 each against the former president of a broker-dealer and a former broker for their actions in transferring customer information to a new firm as the defunct firm wound down. The SEC also fined the brokerage firm’s former chief compliance officer $15,000 for compliance failures and security breaches that took place at the defunct firm, some dating back to 2005. Click here to read our client alert about the SEC's recent action.

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On March 28, 2011, the Massachusetts Superior Court issued a Final Judgment by Consent between the Commonwealth and Briar Group, LLC that resolves allegations that Briar Group failed to take measures to protect consumer credit and debit card information. The Final Judgment stems from an April 2009 information security breach in which outside hackers used malware to gain access to Briar Group’s computer systems and extract payment card information about the company’s restaurant and bar customers. Pursuant to the Final Judgment, Briar Group must pay $110,000 to the Commonwealth, establish a written information security program (“WISP”), and implement a number of other information security measures to help protect customer data.

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