Background Check Services Provider Agrees to Settle FTC Allegations that it Falsely Claimed Participation in the EU-U.S. Privacy Shield

A company that provides security and investigative services, including background check services, has agreed to settle Federal Trade Commission allegations that the firm misrepresented its participation in and compliance with the EU-U.S. Privacy Shield framework, which enables companies to transfer consumer data legally from European Union countries to the United States.

In a complaint, the FTC alleges that New York-based T&M Protection Resources, LLC continued to claim participation in the EU-U.S. Privacy Shield after its certification lapsed. In addition, the company failed to verify annually that statements about its Privacy Shield practices were accurate and failed to affirm that it would continue to apply Privacy Shield protections to personal information collected while participating in the program.

As part of the settlement, T&M is prohibited from misrepresenting its participation in the EU-U.S. Privacy Shield framework, any other privacy or data security program sponsored by the government, or any self-regulatory or standard-setting organization. In addition, T&M is required either to continue to apply the Privacy Shield protections to personal information it collected while participating in the program or to return or delete the information.

The Commission voted 5–0 to issue the proposed administrative complaint and to accept the consent agreement with the company. The FTC published a description of the consent agreement package in the Federal Register. The agreement will be subject to public comment until March 4, 2020, after which the Commission will decide whether to make the proposed consent order final. Once processed, comments will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $43,280.

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