Sears settles FTC charges it tracked online consumers

[ Photo: Mateusz Stachowski ]

Yesterday, the parent company of Sears and Kmart settled charges by the Federal Trade Commission that it used software to track the online bank statements, drug prescription records, video rental records, library borrowing histories, and personal e-mail of some Sears’ customers without adequately disclosing that activity to them.

As we reported here on Wednesday, the FTC has expressed concern that more consumer data is being collected online than is necessary.

In this case, the agency says, some online customers were invited by Sears to participate in an initiative called “My SHC Community.” Those who accepted were paid $10 and asked to download “research” software that would confidentially track their “online browsing.” But the FTC said the broad extent of the tracking was revealed only in a lengthy user agreement, which the agency ruled was “deceptive” and in violation of the FTC Act.

Data collection by online advertisers was a hot topic at this week’s Computers, Freedom, and Privacy conference in Washington, DC.

As part of the settlement, Sears agreed to destroy any consumer data it has already collected and to clearly and prominently inform consumers about any data it collects. —Jeff Fox