ReverseAuction Settles FTC Privacy Charges

Online auction house Inc. agreed this week to settle Federal Trade Commission charges that it violated consumers’ privacy by capturing customer information from a competitor’s site and then sending deceptive e-mails to those customers soliciting their business.

ReverseAuction, Washington, is barred from engaging in such practices in the future and must delete the personal information of customers who received the offer but declined to register with ReverseAuction. In addition, the company must give those who did register as a result of the solicitation the opportunity to cancel.

According to the FTC, ReverseAuction registered with competitive online auction site eBay and, in violation of its privacy agreement with eBay, harvested the e-mail addresses of that site’s customers.

ReverseAuction then sent those customers e-mails containing a deceptive subject line informing them that their eBay user ID “will expire soon.”

Many customers believed that eBay authorized the mailing, the FTC said. Sending deceptive spam, violating the eBay user agreement and misleading customers about the source of the e-mail were violations of federal law, the FTC said.

Reverse Auction issued a statement denying any wrongdoing and saying that it has agreed to comply with the FTC’s remedy so it can put the matter behind it.

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