Workshop Planned to Discuss Strategies for Providing Effective Financial Privacy Notices

The Federal Trade Commission is seeking public comment on a proposal to extend for two years the period during which Web sites directed to children can use an e-mail message from the parent, coupled with additional steps, to obtain verifiable parental consent for the collection of personal information from children. In a Federal Register Notice to be published shortly, the Commission proposes to extend the time period from April 21, 2002 until April 21, 2004 and requests comments on this proposal.

The Children's Online Privacy Protection Rule applies to operators of commercial Web sites and online services directed to children under the age of 13, and to general audience Web sites and online services that knowingly collect personal information from children under 13. Among other things, the Rule requires that Web sites get verifiable consent from a parent or guardian before they collect personal information from children.

The Rule uses a sliding scale approach for obtaining verifiable parental consent, which depends upon the reason the personal information is collected. If a Web site is collecting personal information solely for its internal use, and is not disclosing the information to the public or third parties, the Rule allows the site to obtain parental consent through the use of an e-mail message from the parent, coupled with additional steps. If the Web site is going to disclose the personal information to the public or third parties, the Rule requires that the Web site use more reliable methods to obtain the parent's consent. This sliding scale mechanism is set to expire on April 21, 2002, at which time Web sites must obtain verifiable parental consent using the more reliable methods for all uses of personal information.

When it issued the final Rule, the Commission anticipated that the sliding scale was necessary only in the short term because the more reliable methods of obtaining verifiable parental consent would soon be widely available and affordable. Now it appears that the expected progress in available technology has not yet occurred. The Commission proposes to amend the Rule to extend the sliding scale mechanism for an additional two years.

The Commission seeks comment on several questions, including the current and anticipated availability and affordability of secure electronic mechanisms and/or infomediary services for obtaining parental consent. The Commission also seeks comment on the length of the proposed extension and the negative impact, if any, of extending the sliding scale mechanism.

Written comments will be accepted until November 30, 2001. Copies of the Federal Register Notice 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. For further information about the COPPA Rule, see http://www.ftc.gov/kidzprivacy.

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.

(FTC File No. P99 4504)