BBB asks “Do You Know What You are Handing over to Advertisers?”

August 13, 2015

Terms and Conditions for Common Transactions May Surprise and Frighten You 

Cromwell, CT – If a stranger asked for permission to access all of your contacts and monitor your incoming and outgoing email in exchange for a free service, would you agree?  Connecticut Better Business Bureau warns most consumers are doing just that because they don’t read terms and conditions in documents and online.

These disclosures contain the details of limitations, exclusions, cancellation procedures, fees, and data collection and sharing.  These are typically detailed in several pages of legalese that is formatted in small print where, according to regulators, businesses sometimes hide other important information.

In one example, the terms and conditions for a free contact management mobile app clearly explains that it not only requires access to all of your contacts, but also captures and stores the telephone numbers, email addresses, contacts’ addresses and more.  Aside from storing and sharing this information with other parties, developers say the app may also collect logins, passwords and information gleaned from your connected social media sites and scan your email for information about who you are communicating with, how frequently and any information contained in an email signature.

(See examples in PDF format)

Unfortunately, consumers who didn’t read the fine print downloaded the app without knowing they were giving consent for open access to information they otherwise would not have given.

The prevalence of cybercrime, identity theft and sharing of personal information makes consumers and regulators increasingly uncomfortable.  So does the fact that some disclosures lack important information that would help consumers make educated decisions.

The Federal Trade Commission (FTC) is monitoring the situation, and sent warning letters to more than 60 companies – including 20 of the 100 largest advertisers – telling them that they failed to make adequate disclosures in print and broadcast ads.  The FTC says the unnamed companies:

  • Failed to reveal terms attached to special introductory offers
  • Neglected to tell consumers they would be billed automatically
  • Made false advertising claims
  • Did not disclose that product demonstrations were altered

In the letters the FTC made clear to advertisers that disclosures should be “clear and conspicuous,” and asked them to report back on what measures they will implement to resolve these problems.

The FTC recently settled a case against the social media app Snapchat for deceiving users when it claimed that messages sent through the service would disappear quickly.  The complaint against Snapchat says the company also misled consumers about personal data collection, unauthorized sharing of that information and measures to protect their data from misuse.

The regulator has been letting other businesses know that just because they did not receive the warning letter, they should not assume that their disclosure practices are adequate.  The FTC advised businesses to follow the “4 Ps,” Prominence, Presentation, Placement and Proximity when disclosing their terms and conditions.

In the meantime, BBB recommends that you read disclosures for all transactions, contracts, trials and website registration, and look for information about opting-out of information-sharing. You should carefully consider whether a free or paid service is worth the hidden cost of your personal data collection, storage and distribution to other parties.

If you feel a transaction was based on misleading claims or lack of disclosure, you can file a complaint with your BBB.

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