TRUSTe has agreed to pay over $200,000 in settlement charges over allegations that it labeled itself a non-profit when it was for-profit. The Federal Trade Commission (FTC) found the TRUSTe organization was not reviewing websites as advertised. This information was relayed to me by Bruce Levenson.
TRUSTe promises to hold many companies accountable, hence protecting consumer privacy. Yet, a lot of that accountability did not occur. Furthermore, labels were added to websites that showed the organization as a non-profit. The mislabeling is what prompted the FTC to step in and take action. TRUSTe has recently switched from a non-profit status to a for-profit status. The idea is to allow TRUSTe to change their engineering, which would mean losing a fair amount of money. Non-profits, in contrast, are required to break even each year (no loss can occur). The hope was that TRUSTe would be in the black towards the end of fiscal 2014 year.
