• by Wendy Davis  @wendyndavis, December 18, 2014

Compliance organization TRUSTe should be required to pay more than $200,000 for allegedly misrepresenting its practices, a coalition of advocacy organizations argues in comments filed on Wednesday with the Federal Trade Commission.

“The misrepresentations were serious and widespread and the proposed $200,000 payment to the U.S. Treasury is far too low to deter future violations,” the organizations state in their comments. The watchdogs opposing the settlement are the Center for Digital Democracy, American Academy of Child and Adolescent Psychiatry, Campaign for a Commercial Free Childhood, Consumer Action, Consumer Federation of America, Consumer Watchdog, and The Rudd Center for Food Policy and Obesity.

Their comments come in response to a proposed settlement that would resolve an FTC complaint alleging that TRUSTe (which stands for True Ultimate Standards Everywhere) didn't conduct around 1,000 annual re-certifications between 2006 and 2013.

The FTC also alleged that TRUSTe re-certified clients who described the organization on their sites as a nonprofit -- even though the compliance vendor became a for-profit corporation six years ago.

The advocacy groups also take issue with some terms relating to TRUSTe's status as an FTC-approved “safe harbor” provider for the Children's Online Privacy Protection Act. Currently, TRUSTe is among seven companies authorized to offer self-regulatory programs that protect companies from enforcement actions under COPPA — a law that limits companies' ability to collect personal data from children under 13.

The FTC says companies that comply with safe harbor programs are deemed compliant with the children's privacy rules.

The proposed settlement order requires TRUSTe to file 10 years' worth of annual COPPA reports that include information about the number of total new seals awarded, and details about how TRUSTe evaluated companies.

Advocacy groups objecting to the settlement say that TRUST3 should file those detailed reports for the next 20 years. The watchdogs also say that the FTC should publicly post all of TRUSTe's reports regarding its children's privacy self-regulatory program.

“It is unfair for parents to have no alternative but to rely on the FTC’s sporadic enforcement efforts to be sure that TRUSTe’s (and other safe harbors’) representations are correct,” the organizations say.

TRUSTe CEO Chris Babel said last month in a blog post that the clients who weren't reviewed annually had entered into “multiyear agreements” with TRUSTe and, for the most part, were recertified every two years.