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The State AG Report 1.14.2021: Charity Shenanigans | Virtual In-Game Rewards Not Real | Apps’ Data Privacy Lapses

Cozen in the News

Paul Connell, Former Wisconsin Deputy Attorney General, Joins Cozen O’Connor’s State Attorneys General Group

  • Former Wisconsin Deputy AG Paul Connell has joined Cozen O’Connor’s State AG Group as a Member.
  • Connell served as Deputy AG and as senior counsel to then-Wisconsin AG Brad Schimel from 2015 to 2019. In those roles, he directed legal strategy in all of the state’s significant multistate consumer protection cases, advised state agencies and the Office of the Governor, and developed and executed policy initiatives that profoundly impacted all aspects of the state economy.
  • Connell has been at the forefront of leading corporate responses to multistate enforcement actions and investigations, and his practice encompasses matters involving state AGs and the U.S. Department of Justice in consumer protection, privacy, and environmental law matters across a diverse range of industries, including technology, pharmaceuticals, manufacturing, and health care.

 2022 AG Elections

Democratic Challenger Seeks 2022 Rematch Against Georgia’s Incumbent Attorney General

 Charities

Charity Purporting to Help Wounded Veterans Settles Allegations of Misleading Solicitations

  • A bipartisan group of 11 AGs reached a settlement with purported veterans’ charity Healing Heroes Network, Inc. and associated individuals (collectively, “Healing Heroes”) to resolve allegations that it deceptively solicited donations in violation of the respective states’ laws governing charitable organizations.
  • According to the AGs, Healing Heroes allegedly made misleading and deceptive solicitations via sweepstakes and telemarketing campaigns, including falsely claiming that 100% of donations went to veterans’ medical care and other benefits, while the charitable contributions were actually used to pay for salaries, professional fundraisers, and online advertising, among other things.
  • Under the terms of the settlement, Healing Heroes will pay $95,000 to a veterans’ charity with a mission that matches the representations made to donors, will permanently cease operations and not engage in any charitable solicitations, and must pay $400,000 if they violate the settlement agreement. The individual defendants are also banned from charity management roles for 5 years.

 Consumer Protection

Mobile Advertising Company Settles Allegations it Cheated Gamers Out of Rewards

  • The Federal Trade Commission (“FTC”) reached a settlement with mobile advertising company Tapjoy, Inc. to resolve allegations that it failed to deliver promised in-game rewards to consumers in violation of the FTC Act.
  • The complaint alleged that Tapjoy operated an advertising platform within mobile games, offering players virtual rewards like game currency for completing tasks from third-party advertisersincluding purchasing products and providing their email addressesbut that it frequently failed to provide the reward it promised for the completion of the task. According to the complaint, in response to receiving hundreds of thousands of complaints from consumers who were not issued the promised rewards, Tapjoy took steps to make it more difficult for consumers to submit complaints.
  • Under the terms of the proposed consent order, Tapjoy must clearly and conspicuously inform consumers about the terms of its reward offers, including specifying that third-party advertisers determine whether a reward is to be issued, and must monitor third-party advertisers to ensure that they provide the promised rewards and discipline advertisers who mislead consumers, among other things.

 Data Privacy & Security

Photo and Video App Settles Allegations of Misleading Users about Their Privacy

  • The FTC reached a settlement with photo app developer Everalbum, Inc. to resolve allegations that its app, Ever, misled consumers about its privacy practices in violation of the FTC Act.
  • The complaint alleged that Ever, which stores users’ photos and videos uploaded from their electronic devices, used a default setting that allowed facial recognition technology to group users and allow the tagging of people by name despite its representations that it would not apply such technology to a user’s content without the user affirmatively activating the option, and that Everalbum failed to delete photos and videos from deactivated accounts as promised.
  • Under the terms of the proposed consent order, among other things, Everalbum is required to delete all facial recognition data that the company derived from users’ photos without express consent and photos and videos from deactivated accounts. Everalbum is also prohibited from misrepresenting its data and personal information usage and privacy and security practices.

 Fertility App Settles Allegations It Shared Users’ Sensitive Health Information Without Consent

  • The FTC reached a settlement with fertility app developer Flo Health, Inc. to resolve allegations that its app, Flo Period & Ovulation Tracker, misled consumers about the privacy and security of their sensitive health information in violation of the FTC Act.
  • The complaint alleged that Flo Health shared users’ individual fertility data—which was linked to a unique advertising identifier for each user—with third parties, despite claims that it protected users’ sensitive information and its Privacy Policy which stated that third parties would only receive non-personally identifiable information, among other things.
  • Under the terms of the proposed consent order, Flo Health will be prohibited from making false or deceptive statements about its data privacy and security practices and the extent to which consumers can control the sharing of their information, must obtain a user’s express informed consent before sharing that user’s health information with a third party, and must request third parties to delete information obtained from app users, among other things.