[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Notices]
[Pages 35391-35393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14372]


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FEDERAL TRADE COMMISSION

[File No. 102 3094]


Franklin Budget Car Sales, Inc.; Analysis of Proposed Consent 
Order 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 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 July 9, 2012.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Franklin Auto Mall, 
File No. 102 3094'' on your comment, and file your comment online at 
https://ftcpublic.commentworks.com/ftc/franklinautomallconsent, by 
following the instructions on the Web-based form. If you prefer to file 
your comment on paper, mail or deliver your comment to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-113 
(Annex D), 600 Pennsylvania Avenue NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Karen Jagielski (202-326-2509), FTC, 
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW., Washington, 
DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and 2.34 the 
Commission 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 June 7, 2012), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue NW., Washington, DC 
20580, either in person or by calling (202) 326-2222.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before July 9, 2012. 
Write ``Franklin Auto Mall, File No. 102 3094'' on your comment. Your 
comment--including your name and your state--will be placed on the 
public record of this proceeding, including, to the extent practicable, 
on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to 
remove individuals' home contact information from comments before 
placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/franklinautomallconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Franklin Auto Mall, File 
No. 102 3094'' on your comment and on the envelope, and mail or deliver 
it to the following address: Federal Trade Commission, Office of the 
Secretary,

[[Page 35392]]

Room H-113 (Annex D), 600 Pennsylvania Avenue NW., Washington, DC 
20580. If possible, submit your paper comment to the Commission by 
courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before July 9, 2012. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, a consent agreement from Franklin's Budget Car Sales, Inc., 
also doing business as Franklin Toyota/Scion (``Franklin Toyota'').
    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 appropriate action or make final 
the agreement's proposed order.
    The Commission's proposed complaint alleges that Franklin Toyota, a 
Georgia corporation, is a franchise automobile dealership that sells 
both new and used automobiles, leases automobiles, provides repair 
services for automobiles, and sells automobile parts. In connection 
with its automobile sales, Franklin Toyota also provides financing 
services to individual consumers. The complaint alleges that In the 
course of its business, Franklin Toyota routinely collects personal 
information from or about its customers, including but not limited to 
names, Social Security numbers, addresses, telephone numbers, dates of 
birth, and drivers' license numbers. The complaint alleges that 
Franklin Toyota is a ``financial institution'' as defined in the Gramm-
Leach-Bliley (``GLB'') Act, 15 U.S.C. Sec.  6801 et seq.
    According to the complaint, Franklin Toyota engaged in a number of 
practices that, taken together, failed to provide reasonable and 
appropriate security for personal information on its computers and 
networks. In particular, Franklin Toyota failed to: (1) Assess risks to 
the consumer personal information it collected and stored online; (2) 
adopt policies, such as an incident response plan, to prevent, or limit 
the extent of, unauthorized disclosure of personal information; (3) use 
reasonable methods to prevent, detect, and investigate unauthorized 
access to personal information on its networks, such as inspecting 
outgoing transmissions to the Internet to identify unauthorized 
disclosures of personal information; (4) adequately train employees 
about information security to prevent unauthorized disclosures of 
personal information; and (5) employ reasonable measures to respond to 
unauthorized access to personal information on its networks or to 
conduct security investigations where unauthorized access to 
information occurred.
    The complaint alleges that as a result of these failures, Franklin 
Toyota customers' personal information was accessed and disclosed on 
peer-to-peer (``P2P'') networks by a P2P application installed on a 
computer connected to Franklin Toyota's computer network. The complaint 
alleges that information for approximately 95,000 consumers, including 
but not limited to consumers' names, Social Security numbers, 
addresses, dates of birth, and drivers' license numbers, was made 
available on a P2P network. Such information can easily be used to 
facilitate identity theft and fraud.
    Files shared to a P2P network are available for viewing or 
downloading by anyone using a personal computer with access to the 
network. Generally, a file that has been shared cannot be permanently 
removed from P2P networks.
    In fact, the use of P2P software poses very significant data 
security risks to consumers. A 2010 FTC examination of P2P-related 
breaches uncovered a wide range of sensitive consumer data available on 
P2P networks, including health-related information, financial records, 
and drivers' license and social security numbers. See Widespread Data 
Breaches Uncovered by FTC Probe: FTC Warns of Improper Release of 
Sensitive Consumer Data on P2P File-Sharing Networks (Feb. 22, 2010), 
http://www.ftc.gov/opa/2010/02/p2palert.shtm. Files shared to a P2P 
network are available for viewing or downloading by any computer user 
with access to the network. Generally, a file that has been shared 
cannot be removed permanently from the P2P network. In addition, files 
can be shared among computers long after they have been deleted from 
the original source computer.
    According to the complaint, Franklin Toyota violated the GLB 
Safeguards Rule by, among other things, failing to identify reasonably 
foreseeable internal and external risks to the security, 
confidentiality, and integrity of customer information; design and 
implement information safeguards to control the risks to customer 
information and failing to regularly test and monitor them; 
investigate, evaluate, and adjust the information security program in 
light of known or identified risks; develop, implement, and maintain a 
comprehensive written information security program; and designate an 
employee to coordinate the company's information security program.
    In addition, the proposed complaint alleges that Franklin Toyota 
misrepresented that it implements reasonable and appropriate measures 
to protect consumers' personal information from unauthorized access, in 
violation of Section 5 of the Federal Trade Commission Act (``FTC 
Act''), 15 U.S.C. 45(a). Furthermore, the proposed complaint alleges 
that Franklin violated the GLB Privacy Rule by failing to send 
consumers annual privacy notices and by failing to provide a mechanism 
by which consumers could opt out of information sharing with 
nonaffiliated third parties.
    The proposed order contains provisions designed to prevent Franklin 
Toyota from engaging in the future in practices similar to those 
alleged in the complaint.
    Part I of the proposed order prohibits misrepresentations about the 
privacy, security, confidentiality, and integrity of any personal 
information collected from or about consumers. Part II of the proposed 
order prohibits Franklin Toyota from violating any provision of the GLB 
Act's Standards for Safeguarding Consumer Information Rule 
(``Safeguards Rule''), 16 CFR part 314, or the GLB Act's Privacy of 
Consumer Financial Information Rule (``Privacy Rule''), 16 CFR part 
313. Part III requires Franklin Toyota to establish, implement, and 
thereafter maintain a comprehensive information security program, 
including the designation of an employee to oversee Franklin Toyota's 
security program, employee training, and implementation of reasonable 
safeguards. Part IV of the order requires Franklin Toyota to obtain, 
for a period of twenty years, biennial assessments of its information 
security program from an independent third-party professional 
possessing certain credentials or certifications.
    Parts V through IX of the proposed order are reporting and 
compliance provisions. Part V requires Franklin

[[Page 35393]]

Toyota to retain documents relating to its compliance with the order. 
For most records, the order requires that the documents be retained for 
a five-year period. For the third party assessments and supporting 
documents, Franklin Toyota must retain the documents for a period of 
three years after the date that each assessment is prepared. Part VI 
requires dissemination of the order now and in the future to persons 
with responsibilities relating to the subject matter of the order. Part 
VII ensures notification to the FTC of changes in corporate status. 
Part VIII mandates that Franklin Toyota submit a compliance report to 
the FTC within 90 days, and periodically thereafter as requested. Part 
IX is a provision ``sunsetting'' the order after twenty (20) years, 
with certain exceptions.
    The purpose of the analysis is to aid public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order or to modify its terms in any way.

    By direction of the Commission.
Richard C. Donohue,
Acting Secretary.
[FR Doc. 2012-14372 Filed 6-12-12; 8:45 am]
BILLING CODE 6750-01-P