[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