[Federal Register Volume 68, Number 23 (Tuesday, February 4, 2003)]
[Notices]
[Pages 5640-5642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2531]


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FEDERAL TRADE COMMISSION

[File No. 022 3249]


Educational Research Center of America, Inc., et al.; Analysis To 
Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before February 28, 2003.

ADDRESSES: Comments filed in paper form should be directed to: FTC/
Office of the Secretary, Room 159-H, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments filed in electronic form should be 
directed to: [email protected], as prescribed below.

FOR FURTHER INFORMATION CONTACT: Laura Mazzarella or Jessica Rich, FTC, 
Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580, (202) 326-3224.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34 
of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for January 29, 2003), on the World Wide Web, at ``http://www.ftc.gov/os/2003/01/index.htm.'' A paper copy can be obtained from the FTC 
Public Reference

[[Page 5641]]

Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, DC 20580, 
either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Comments filed in paper form should 
be directed to: FTC/Office of the Secretary, Room 159-H, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. If a comment contains 
nonpublic information, it must be filed in paper form, and the first 
page of the document must be clearly labeled ``confidential.'' Comments 
that do not contain any nonpublic information may instead be filed in 
electronic form (in ASCII format, WordPerfect, or Microsoft Word) as 
part of or as an attachment to email messages directed to the following 
e-mail box: [email protected]. Such comments will be considered 
by the Commission and will be available for inspection and copying at 
its principal office in accordance with Section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice, 16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from Educational Research 
Center of America, Inc., (``ERCA'') and its officer Marian Sanjana 
(``Sanjana''), and Student Marketing Group, Inc., (``SMG'') and its 
officer Jan Stumacher (``Stumacher''). ERCA is a student survey company 
that provides student data, through SMG, to colleges and universities 
and other entities for recruitment and marketing purposes. SMG is a 
commercial list broker that supplies names for youth marketing 
campaigns.
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    This matter concerns representations about how detailed, personal 
information collected from middle, junior high, and high school 
students through a survey would be used. The proposed respondents 
distribute a survey to middle, junior high, and high school teachers 
and guidance counselors with the request that they have their students 
complete the survey. The survey collects from students personal 
information including name, address, age, race, religious affiliation, 
and academic, career, and athletic interests. ERCA compiles personal 
information collected from high school students into a survey report 
that it provides to colleges and universities. It also provides 
personal information collected through the survey to SMG. SMG provides 
the survey information to colleges and universities, and also creates 
lists of students that it provides to commercial entities for use in 
marketing. Such entities include, but are not limited to, banks, 
insurance companies, consumer goods and services providers, and list 
brokers.
    The Commission's complaint charges that the proposed respondents 
falsely represented that information collected from students through 
the survey is shared only with colleges, universities, and other 
entities providing education-related services when, in fact, such 
information is also shared with commercial entities for marketing 
purposes. The complaint also alleges that the proposed respondents 
falsely represented that information collected from middle and junior 
high school students through the survey is compiled into survey reports 
when, in fact, little if any such information is compiled into survey 
reports; instead it is primarily shared with commercial entities for 
marketing purposes.
    Part I of the consent order prohibits the proposed respondents, in 
connection with the collection of personally identifiable information 
from an individual, from misrepresenting how such information is 
collected or will be used or disclosed. Part II of the order prohibits 
the proposed respondents, in connection with the collection of 
personally identifiable information from students for any 
``noneducational-related marketing purpose,'' from using or disclosing 
such information unless they disclose (1) the existence and nature of 
such noneducational-related marketing purpose, (2) the types or 
categories of any entities to which the information will be disclosed, 
and (3) that the information used or disclosed is personally 
identifiable.
    The proposed order defines ``noneducational-related marketing 
purpose'' to mean for the purpose of marketing products or services, or 
selling personally identifiable information from or about an individual 
for use in marketing products or services to individuals. The 
definition specifically excludes the use of personal information in 
connection with certain activities determined to be ``educational 
products or services'' under the No Child Left Behind Act of 2001, 
namely (a) college or postsecondary education recruitment, or military 
recruitment; (b) book clubs, magazines, and programs providing access 
to low-cost literary products; (c) curriculum and instructional 
materials used by elementary schools and secondary schools; (d) student 
recognition programs; or (e) any other activity expressly determined 
under the No Child Left Behind Act or its implementing regulations to 
be an ``educational product or service.'' In addition, the proposed 
order provides that when determining whether any specific activity is 
an ``educational product or service,'' any official, written, publicly-
disseminated interpretation by the Department of Education regarding 
such activity shall be controlling.
    Part III of the order prohibits the proposed respondents from using 
or disclosing for any noneducational-related marketing purpose any 
personally identifiable information that was collected through surveys 
distributed prior to July 30, 2002. In addition to the educational 
purposes excepted from the definition of ``noneducational-related 
marketing purpose,'' Part III also permits the proposed respondents to 
use such information for the purpose of (a) job recruitment, (b) the 
provision of student loans, or (c) the provision of standardized test 
preparation services.
    To address respondents' collection of information from younger 
children, Part IV of the order requires the proposed respondents to 
delete all personally identifiable information collected through 
surveys from any student who was under the age of thirteen at the time 
of collection.
    The remainder of the proposed order contains standard requirements 
that the proposed respondents maintain copies of privacy statements and 
other documents relating to the collection, use or disclosure of 
personally identifiable information; distribute copies of the order to 
certain company officials and employees; notify the Commission of any 
change in the corporation that may affect compliance obligations under 
the order; and file one or more reports detailing their compliance with 
the order. Part X of the proposed order is a provision whereby the 
order, absent certain circumstances, terminates twenty years from the 
date of issuance.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.

[[Page 5642]]

    This proposed order, if issued in final form, will resolve the 
claims alleged in the complaint against the named respondents. It is 
not the Commission's intent that acceptance of this consent agreement 
and issuance of a final decision and order will release any claims 
against any unnamed persons or entities associated with the conduct 
described in the complaint.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 03-2531 Filed 2-3-03; 8:45 am]
BILLING CODE 6750-01-P