Upromise, a Web service accused of collecting extensive information about its users without their consent, will be required to clearly disclose its data collection practices and obtain users' consent before installing a browser toolbar on their computers under a settlement approved by the U.S. Federal Trade Commission.
Upromise allows users to save money for college by putting a percentage of their online purchases into a college savings plan. In January, the FTC announced that it hadfiled a complaint against the company, a subsidiary of college loan firm Sallie Mae, with the agency alleging that Upromise had collected extensive information, including in some cases bank account numbers, from about 150,000 users through a downloadable browser toolbar.
Upromise didn't immediately respond to a request for comments on a settlement approved by FTC. The agency announced on Tuesday that it had officially approved a proposed settlement.
The company halted data collection by the toolbar, available since 2005, in January 2010, after a security researcher disclosed the collection.
The toolbar, called the Upromise TurboSaver Toolbar, collected the names of websites users visited, all links clicked, usernames, passwords, and search terms, according to the FTC complaint. From July 2009 to January 2010, the toolbar also collected user information on secure websites, including online banks, the FTC said in its complaint. In some cases, the toolbar transmitted users' credit card numbers, bank account numbers, and Social Security numbers over the Internet in clear text, the FTC said.
"There was no way for consumers -- without special software and technical expertise -- to discover the extent of the data collection," the FTC's complaint said.
The TurboSaver privacy statement told users the toolbar would "infrequently" collect some personal information and would remove personally identifiable information. But a filter used by the toolbar to avoid collecting some data was "too narrow and improperly structured," the complaint said.
The FTC settlement bars Upromise from making misrepresentations about its privacy and security practices and will require the company to establish an information security program. The settlement also requires the company to obtain independent security audits every other year for the next 20 years.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is email@example.com.