Online Privacy and Security Certificate Company Settles with FTC

By Matthew Harwood

A company that verifies whether retail and other Web sites adequately secure customers' personal information has agreed to settle charges with the Federal Trade Commission (FTC) that it misled its customers.

The FTC alleges that Atlanta-based ControlScan sold privacy and security certificates to its customers' Web sites but did not actually verify whether the Web site had adequate privacy or security protections instituted. The government's consumer protection agency also alleges that ControlScan's security certificates carried the current date stamp even though the company did not review the privacy or security protections that day. "In some instances, Web sites were reviewed only weekly, and in other instances, ControlScan did no ongoing review of a company’s fitness to continue displaying seals," the FTC said in a statement.

Third-party security and privacy certifications, the FTC notes, are a critical way online merchants show their customers that they have taken the appropriate steps to protect their identity and financial information. ControlScan's Web site claims its "Verified Secure seal" tells a merchants' customers that it is "serious about security."

Give your customers the peace of mind of knowing that you are taking steps to help ensure their information will remain safe and confidential. Our security seals are backed by the latest advances in Website scanning technology, vulnerabilities reporting portal – and our own ever-vigilant specialists.

Richard Stanton, the founder and former CEO of ControlScan, has agreed to no longer misrepresent that his company verified Web sites' privacy and security protections. He can also no longer misrepresent that his company reviews Web sites' privacy and security protections daily, the FTC reports. Stanton agreed to give up ill-gotten gains amounting to $102,000.

ControlScan's settlement with the FTC will also require the company to contact its clients and inform them that they must take down their privacy and security certificates that tell customers that their Web sites are safe and secure.Additionally, the FTC levied a $750,000 judgment on ControlScan, but the commission suspended it due to the company's inability to pay.

The FTC's statement finally notes that the settlement reached between it and ControlScan does not mean ControlScan or Stanton admitted a law violation.

♦ Screen shot of ControlScan's Web site


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