Online advertiser ValueClick, Inc. will pay a record $2.9 million to settle Federal Trade Commission charges that its advertising claims and emails were deceptive and violated federal law.
The agency also charged that ValueClick and its subsidiaries, Hi-Speed Media and E-Babylon did not secure consumer’s sensitive financial information, even though they claimed to do so.
ValueClick Logo
(Photo Credit: ValueClick)
The FTC said Hi-Speed Media used misleading emails, banner ads, and pop-ups to attract consumers to its Web sites. The emails and online ads claimed that consumers were eligible for “free” gifts, including laptops, iPods, and gift cards.
The FTC alleged that consumers lured to ValueClick’s Web sites by these promises had to go through a number of expensive third-party offers – including car loans and satellite television subscriptions which they were required to participate in at their own expense, so they could receive the “free” merchandise.
The FTC maintained that ValueClick’s use of deceptively labeled email offering free gifts and its failure to disclose that people must spend substantial amounts of money to receive the promised “free” merchandise violates the CAN-SPAM Act and the FTC Act.
The FTC also charged that ValueClick, Hi-Speed Media, and E-Babylon, misrepresented that they secured customer’s sensitive financial information. The FTC alleged the companies published online privacy policies claiming they encrypted customer information, but either failed to encrypt the information at all or used a non-standard and insecure form of encryption.
The settlement requires ValueClick to clearly disclose the costs and obligations of its products it claims are “free” to consumers and bars future violations of the CAN-SPAM Act.
