UNITED STATES OF AMERICA
The Federal Trade Commission has conducted an investigation of certain acts and practices of Educational Research Center of America, Inc. and Student Marketing Group, Inc., corporations; Marian Sanjana, individually and as an officer of Educational Research Center of America, Inc.; and Jan Stumacher, individually and as an officer of Student Marketing Group, Inc. ("proposed respondents"). Proposed respondents, having been represented by counsel, are willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint. Therefore,
IT IS HEREBY AGREED by and between Educational Research Center of America, Inc. and Student Marketing Group, Inc., by their duly authorized officers, and Marian Sanjana and Jan Stumacher and counsel for the Federal Trade Commission that:
1. Proposed respondent Educational Research Center of America, Inc. ("ERCA") is a Pennsylvania corporation with its principal office or place of business headquartered in Pittsburgh, Pennsylvania.
2. Proposed respondent Marian Sanjana is an officer of ERCA. Her principal office or place of business is the same as that of ERCA.
3. Proposed respondent Student Marketing Group, Inc. ("SMG") is a New York corporation with its principal office or place of business at 300 Merrick Road, Suite 206, Lynbrook, New York 11563.
4. Proposed respondent Jan Stumacher is an officer and director of SMG. His principal office or place of business is the same as that of SMG.
5. Proposed respondents admit all the jurisdictional facts set forth in the draft complaint.
6. Proposed respondents waive:
7. This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this agreement is accepted by the Commission, it, together with the draft complaint, will be placed on the public record for a period of thirty (30) days and information about it publicly released. The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondents, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision in disposition of the proceeding.
8. This agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.
9. This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondents, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public. When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders. The order shall become final upon service. Delivery of the complaint and the decision and order to proposed respondents' address as stated in this agreement by any means specified in Section 4.4(a) of the Commission's Rules shall constitute service. Proposed respondents waive any right they may have to any other manner of service. The complaint may be used in construing the terms of the order. No agreement, understanding, representation, or interpretation not contained in the order or the agreement may be used to vary or contradict the terms of the order.
10. Proposed respondents have read the draft complaint and consent order. They understand that they may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final.
For purposes of this order, the following definitions shall apply:
1. "Personally identifiable information" or "personal information" shall mean individually identifiable information from or about an individual including, but not limited to: (a) a first and last name; (b) a home or other physical address, including street name and name of city or town; (c) an email address or other online contact information, such as an instant messaging user identifier or a screen name that reveals an individual's email address; (d) a telephone number; (e) a Social Security Number; (f) an Internet Protocol ("IP") address or host name that identifies an individual; (g) a persistent identifier, such as a customer number held in a "cookie" or processor serial number, that is combined with other available data that identifies an individual; or (h) any information, including, but not limited to, grade point average, date of birth, academic or occupational interests, athletic or extracurricular interests, racial or ethnic background, or religious affiliation, that is combined with any of (a) through (g) above.
2. "Noneducational-related marketing purpose" shall mean for the purpose of marketing products or services, or selling personally identifiable information from or about an individual for use in marketing products or services to individuals. Provided, however, that "noneducational-related marketing purpose" does not apply to the collection, disclosure or use of personally identifiable information from or about a student for the exclusive purpose of developing, evaluating, or providing to students or educational institutions (a) college or postsecondary education recruitment, or military recruitment; (b) book clubs, magazines, and programs providing access to low-cost literary products; (c) curriculum and instructional materials used by elementary schools and secondary schools; (d) student recognition programs; or (e) any other activity expressly determined under 20 U.S.C. §1232h(c)(4)(A) or its implementing regulations to be an "educational product or service." Provided further that, for purposes of determining whether any specific activity is covered by subsections (a) through (e) above, or should be deemed to be an "educational product or service," any official written interpretation disseminated to the public by the Department of Education regarding such activity shall be controlling.
3. "Survey" shall mean any survey that is distributed or caused to be distributed by respondents under the name "Educational Research Center of America."
4. "Student" shall mean any elementary school or secondary school student.
5. Unless otherwise specified, "respondents" shall mean ERCA and SMG, and each of the above's successors and assigns and their officers; Marian Sanjana and Jan Stumacher, individually and as officers of the above corporations; and each of the above's agents, representatives, and employees.
6. "Clearly and conspicuously" shall mean as follows:
The message shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the message shall be used in any communication.
7. "Commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.
IT IS ORDERED that respondents, in connection with the collection of personally identifiable information from an individual, shall not misrepresent in any manner, expressly or by implication, how personally identifiable information is collected or will be used or disclosed.
IT IS FURTHER ORDERED that respondents, in connection with the collection of personally identifiable information from students, shall not use or disclose such information for any noneducational-related marketing purpose, unless they disclose clearly and conspicuously (a) the existence and nature of such noneducational-related marketing purpose; (b) the types or categories of any entities to which the information will be disclosed; and (c) that the information used or disclosed is personally identifiable. Such disclosures shall be made in the following locations:
Provided that the disclosures required by this Part II are in addition to, and not in lieu of, any other disclosures that respondents may be required to make, including but not limited to any disclosure required by state or federal law.
IT IS FURTHER ORDERED that respondents shall not use or disclose for any noneducational-related marketing purpose any personally identifiable information collected through surveys distributed prior to July 30, 2002, from any student who was thirteen years or older at the time of collection. For purposes of this Part only, "noneducational-related marketing purpose" shall exclude use or disclosure for the purpose of (a) job recruitment, (b) the provision of student loans, or (c) the provision of standardized test preparation products or services.
IT IS FURTHER ORDERED that respondents shall delete all personally identifiable information collected through surveys distributed prior to the date of service of this order from any student who was under the age of thirteen at the time of collection.
IT IS FURTHER ORDERED that respondents ERCA and SMG, and their successors and assigns, and respondents Marian Sanjana and Jan Stumacher shall, for a period of five (5) years after the date of issuance of this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying a print or electronic copy of all documents demonstrating their compliance with the terms and provisions of this order, including, but not limited to:
IT IS FURTHER ORDERED that respondents ERCA and SMG, and their successors and assigns, and respondents Marian Sanjana and Jan Stumacher shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order. Respondents shall deliver this order to such current personnel within thirty (30) days after the date of service of this order, and to such future personnel within thirty (30) days after the person assumes such position or responsibilities.
IT IS FURTHER ORDERED that respondents ERCA and SMG and their successors and assigns shall notify the Commission at least thirty (30) days prior to any change in the corporation(s) that may affect compliance obligations arising under this order, including, but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in the corporation about which a respondent learns less than thirty (30) days prior to the date such action is to take place, the respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.
IT IS FURTHER ORDERED that respondents Marian Sanjana and Jan Stumacher, for a period of five (5) years after the date of issuance of this order, shall notify the Commission of the discontinuance of their current business or employment, or of their affiliation with any new business or employment involving the collection of personally identifiable information for use in marketing products or services. The notice shall include respondent's new business address and telephone number and a description of the nature of the business or employment and his duties and responsibilities. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580.
IT IS FURTHER ORDERED that respondents ERCA and SMG, and their successors and assigns, and respondents Marian Sanjana and Jan Stumacher shall, within sixty (60) days after service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order.
This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:
Provided, further, that if such complaint is dismissed or a federal court rules that a respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.
Signed this __________day of _____________________________ , 2002.
EDUCATIONAL RESEARCH CENTER OF AMERICA, INC.
STUDENT MARKETING GROUP, INC.
FEDERAL TRADE COMMISSION