Company Rented Customer Information it Pledged to Keep Private
Gateway Learning, which markets and sells products under the “Hooked on Phonics” brand name, is based in Santa Ana, California.
“It's simple – if you collect information and promise not to share, you can't share unless the consumer agrees,” said Howard Beales, Director of the FTC’s Bureau of Consumer Protection. “You can change the rules but not after the game has been played.”
According to the FTC, in April 2003, despite these promises, Gateway Learning started renting personal information provided by consumers – including their names, addresses, phone numbers, and age ranges and gender of their children – to target marketers to send mailings and make telemarketing calls.
The Commission vote to accept the consent agreement was 5-0.
The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through August 6, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.
NOTE: This consent agreement is for settlement purposes only and does not constitute an admission by the defendant of a law violation.
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 in English or Spanish (bilingual counselors are available to take complaints), 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. 042-3047)
Division of Financial Practices
202-326-3424 or 202-326-3224