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http://www.wired.com/news/politics/0,1283,39769,00.html

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Vinod

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TRUSTe Suit Spies Bogus Seals 
Wired News Report 

2:00 a.m. Oct. 27, 2000 PDT 

Privacy-seal program TRUSTe is seeking compensatory and punitive damages
from a
company charged with unauthorized use of TRUSTe's privacy-approval seal. 

TRUSTe filed the suit Wednesday in U.S. District Court in Washington
against Underwriters
Digital Research, the parent company of two websites TRUSTe said
displayed the seal
illegally on their pages. 
The industry-sponsored privacy watchdog wants to bar the sites from
displaying the seal and to recover alleged compensatory and punitive
damages. 

"The goal of the suit is threefold," said TRUSTe spokesman Dave Steer.
"First, to get these parties to immediately remove the TRUSTe seal from
their sites. Second, to send a signal to all other websites that they
had
better think twice before illegally displaying the TRUSTe seal. Third,
to
repair any damage to TRUSTe and the state of trust online through
consumer education." 

The suit seeks $1 million in damages. "At the same time, (the suit
sends)
a signal to other websites that it is not in their best interest to pull
the
wool over the eyes of consumers," Steer said. 

Phone calls to defendants at Underwriters Digital Research seeking
comment were not returned. 

TRUSTe discovered the use of the seal at American-Politics.com and
SurfAssured.com. TRUSTe employs an Internet-monitoring service that
scans for trademark violations and other unauthorized content online.
The company, Imagelock, tracked down the TRUSTe mark with
Web-spidering technology, TRUSTe said. 

Imagelock discovered the seal on e-commerce portions of
American-Politics.com and an online polling page sponsored by
SurfAssured.com, TRUSTe said. The websites were willfully deceiving
users into divulging personally identifiable information, TRUSTe charges
in its lawsuit. 

A Wall Street company directory lists Underwriters Digital Research as
having 22 million "dossiered respondents," with 250 to 3,500
"attitudinal
and demographic datapoints on each respondent," TRUSTe said. Clients of
Underwriters Digital Research reportedly include federal and statewide
political candidates, major universities, and Fortune 500 companies. 

The lawsuit against the company is the first of its kind for TRUSTe.
"Our
ability to engage websites and Web surfers in a fair conversation about
privacy depends on the integrity of the TRUSTe brand," Steer said. "If
we
are to continue getting websites to give users full control over their
personal information to protect privacy, we must taken action against
outlaws like these." 

The companies did not respond to repeated cease-and-desist notices
sent by TRUSTe legal counsel. 

A poster child in the Internet industry's efforts to show that it can
police
itself when it comes to online privacy, TRUSTe has had to contend with
criticism that it lacks strong enforcement power. Some early privacy
cases
fell outside of TRUSTe's purview and forced the organization to expand
its charter. 

But since then, Steer said his organization has demonstrated strong
enforcement power and validated its mission. "Time and again TRUSTe
has displayed evidence of taking aggressive action," he said. "We blew
the
whistle on Toysmart, we've forced sites to take down our mark, we've
conducted public shamings via third-party audits." 

                         
As a result, he said Internet companies have changed business practices.
Criticism that the self-regulatory mechanism doesn't work is "starting
to
sound like a broken (and out of tune) record," Steer added. 

                         
Toysmart was caught in a privacy battle when it went bankrupt and
planned to sell consumer data as one of its assets -- a clear violation
of
its TRUSTe-approved privacy policy. The Federal Trade Commission sued
Toysmart.com on the grounds that it engaged in deception. TRUSTe was
among that company's many critics following the action. 

Early member sites and sponsors of TRUSTe's program included Yahoo,
America Online, CyberCash, Excite, IBM, MatchLogic, Microsoft, Netscape,
and Compaq. Many of the participating companies hoped that a program
like TRUSTe would curb legislative attempt to govern online privacy. 

TRUSTe member sites pay a licensing fee to carry the seal on their
sites.
The fee ranges from a few hundred to $5,000 per year, based on a site's
annual corporate revenue.