VTech to Pay $650,000 in FTC Settlement

VTech Electronics agreed to a $650,000 settlement payment and sanctions by the Federal Trade Commission (FTC) to resolve charges it violated the Children's Online Privacy Protection Act (COPPA), the FTC announced today.

Under COPPA, companies are required to directly notify parents or obtain verifiable parental consent when collecting personal information on their children and also take reasonable measures to safeguard the information. The FTC alleges VTech's Kid Connect app, which had 638,000 children accounts, and its now-defunct Planet VTech gaming and chat platform, which had 130,000 children accounts, violated COPPA requirements.

The FTC also alleges VTech made false claims in its privacy policy by stating it would encrypt information submitted to Planet VTech and also Learning Lodge, which houses the Kid Connect app. However, VTech did not encrypt any of the information, the FTC said.

The FTC settlement agreement also requires VTech to implement a comprehensive data security program, which will undergo independent audits for the next 20 years. VTech is also permanently prohibited from violating COPPA in the future and misrepresenting its security and privacy practices, as part of the settlement agreement.

Read more about VTech's settlement here.