Welcome to the Department of Justice, Iowa Attorney General Tom Miller

For immediate release -- Thursday, July 20, 2000.
Contact Bob Brammer - 515-281-6699

Miller: Protect Privacy of Toysmart.com Customers --
Especially Kids

"This company's privacy policy said personal information is never shared with a third party. Bankruptcy doesn't give them a right to sell it now," Miller said.

Iowa Attorney General Tom Miller and colleagues from 38 other states today asked a U.S. Bankruptcy Court to block a company called Toysmart.com from selling its customer list in bankruptcy proceedings. Miller said the customer list presumably includes detailed information about children who have visited the web site. Toysmart.com sells educational toys.

"Toysmart wants to sell its assets by public auction, including the customer list, but we argue that would be a flat-out contradiction of the company's privacy policy and would violate state consumer protection laws," Miller said.

Toysmart's privacy policy pledged to customers that personal information "is never shared with a third party." Miller said such a policy is especially important when children may visit and make purchases at a web site. The States said the Toysmart customer list likely includes names, addresses, credit card numbers, and information concerning customers' buying and browsing habits. Other companies might want such information to solicit potential customers.

"This company's privacy policy said personal information is never shared with a third party. Bankruptcy doesn't give them a right to sell it now," Miller said. "That would violate the stated privacy policy, be unfair to consumers who relied on the policy, and violate state consumer fraud laws. This is especially important when the customer list probably includes sensitive information about children who visited Toysmart's web site."

The States' formal objection asked the Court to prohibit sale of the customer list other than to a successor to Toysmart that guarantees the privacy rights of consumers. The objection was filed Thursday at the U.S. Bankruptcy Court for the District of Massachusetts. Toysmart.com, LLC is a Delaware corporation.

Miller also pointed out that the Federal Trade Commission issued new rules recently to protect the online privacy of children under age 13. "Web sites directed to children must post their privacy policy at their home page and wherever they collect information from kids," he said. "They also must obtain parental consent before they collect, use, or disclose personal information about a child under age 13 - and parents may revoke consent at any time. This gives a lot of power back to parents to safeguard their kids' personal information online," Miller said.

The FTC rules were issued under the "Children's Online Privacy Protection Act." Miller encouraged parents, kids and businesses to get more detailed information about the rules by going to the FTC's web site: www.ftc.gov/bcp/conline/edcams/kidzprivacy/index.html. "The tips for parents are especially helpful," he said.

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