FTC's List of Corporate Privacy Abusers Shows Advertisers Can't Be Trusted With Data Security

The FTC yesterday published a list of companies that used unfair, deceptive, false or misleading claims about consumer privacy that caused “substantial consumer injury,” and the names on it will surprise you. Sure, many of the companies are mortgage scammers and spam phishers. But lots of them are household and blue-chip brands such as Twitter, TJ Maxx (TJX), Microsoft (MSFT) and Dave & Busters.

The list proves that advertisers cannot be trusted to regulate themselves when it comes to tracking and targeting consumers on the web or on mobile devices. There are currently few rules controlling how advertisers can use personal information gathered from consumers electronically, and if self regulation worked the FTC would not have brought action against these companies for privacy abuses (see pages 7 and 8):

• Twitter
• Dave & Buster’s
• LifeLock
• ValueClick
• CVS Caremark
• The TJX Cos. (TJ Maxx)
• Reed Elsevier
• DSW
• BJ’s Wholesale Club, Inc.
• Nationwide Mortgage Group
• Petco Animal Supplies
• Guess?
• Microsoft Corp.
• Lexis Nexis

In addition, the FTC has brought:

… 15 actions charging website operators with collecting information from children without parents’ consent, as well as 15 spyware cases and dozens of actions challenging illegal spam, …

In Senate testimony, FTC chairman Jon Leibowitz proposed a “do not track” registry to curb advertising spyware, a database that would be similar to the “do not call” registry which prevents junk calls from telemarketers.

Leibowitz is opposed by the advertising industry, which wants to be left alone to regulate itself. But the FTC’s lists suggest the lack of regulation advertisers have enjoyed until now has not stopped privacy abuses.

Time is running out for Congress to preserve what little electronic privacy consumers have left. Consumers are apathetic about their privacy (until they’re denied jobs and college degrees because of a single photo on MySpace). Young people have been raised without privacy and are seemingly not interested in geting it back. And most apps for mobile phones won’t work unless you give the damn things permission to check your location and user information.

The only people who seem to be appropriately spooked by behavioral targeting (the practice of advertisers observing what you do online and serving you sepcific ads based on your clicks) are the old folks in Congress. Ad Age reports:

“I understand that advertising supports the internet, but I am a little spooked out,” said Sen. Claire McCaskill, D-Mo., speaking of behavioral targeting. “This is creepy.”

She described herself as feeling as if she were being “followed around.”

That’s not a “feeling,” senator, that’s actually happening.

While a do-not-track database won’t stop privacy abuses it will still be useful for consumers. I’m on the FTC’s do-not-call list and I still get loads of junk calls, but at least I know that the folks calling me are the least-reputable, least trustworthy telemarketers out there. A do-not-track list might perform a similar service, sorting the sheep from the wolves in sheep’s clothing.

Related:

• Corporate America’s New Anti-Consumer Mantra: “Transparency Is Privacy”
• Just Because You’re Paranoid Doesn’t Mean Google, Facebook and Apple Aren’t Out to Get You
• Why Advertisers Want You to Stop Worrying and Love the End of Privacy
• Google’s Gmail Had Lousy Kids’ Privacy Protection, Says Watchdog
• Google, Omnicom, Others Prepare to End Consumer Privacy - With Your Consent

Image by Flickr user Alan Cleaver, CC.