Law & Courts

FTC to Companies: Follow Rules On Sharing Student Data

By Sean Cavanagh — October 16, 2002 3 min read
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Two companies have settled a complaint brought against them by the Federal Trade Commission that they sold personal information about high school students to commercial marketers, without first warning pupils that private businesses would get that data.

The companies, American Student List and the National Research Center for College and University Admissions, were charged with having collected information from “millions” of students, who were misled in believing only colleges and universities would get the information, federal officials said.

By not making it clear to students that noneducational entities had access to the information, the companies violated federal privacy policies, the FTC alleged.

The agreement with the two companies does not include any admission that they broke the law.

Under the settlement, announced Oct. 2, American Student List, in Mineola, N.Y., and the National Research Center for College and University Admissions, in Lees Summit, Mo., are barred from using data they have already taken from high school students for marketing not related to education. It also prohibits them from turning over similar data to marketers in the future, unless they specify to students where that information is going.

Jessica L. Rich, an assistant director of the FTC’s bureau of consumer protection, said she believes this is the first case the agency has pursued against companies that provide college-admissions information to teenagers.

Ms. Rich declined comment on whether other companies seeking information from students could be accused of violating the same federal privacy laws, but she said she hoped the FTC’s case would protect students.

“We hope to get a broader message across to people who might engage in similar or the same practices,” Ms. Rich said last week.

Changing Procedures

According to FTC officials, the businesses gave out surveys to high school teachers and guidance counselors, asking the school staff members to have students complete the information. The surveys asked for basic biographical information, along with more detailed data, such as academic and work interests and extracurricular activities, the FTC alleged.

In a statement, Don Munce, the president of the National Research Center for College and University Admissions, said he was satisfied with the agreement. The company conducts annual surveys in more than 24,000 public and private schools, and then makes that information available to colleges and universities trying to find qualified students, according to the company’s Web site.

“Our survey had included a privacy statement telling students how the information we collect would be used, including that it would be shared with organizations other than educational institutions,” Mr. Munce said. “Because the FTC believes this statement was not sufficiently detailed, we agreed to modify our statements in communication with students, teachers, and parents.”

American Student List spokesman Greg Kalish said his company helps underwrite a portion of the cost of the surveys administered by Mr. Munce’s company. The survey results are then shared with ASL, which aggregates it and sells it to education customers, he said.

In a statement, American Student List’s chief executive officer, Don Damore, said his business was vigilant in making sure that student information was distributed in accordance with the law.

“We have long had policies and procedures in place to ensure the integrity of the use of the information contained in our lists,” Mr. Danmore.

In explaining their survey to school officials, the companies’ written language did not make it clear information would be sold to private marketers, in what amounted to a deceptive practice, the FTC complaint charged.

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