“This is a clear victory for children’s privacy in the age of mobile devices and the easy transfer of personal information,” Attorney General Chiesa said. “Parents should be aware that smartphones and similar devices are able to gather a great deal of information about users, including their identities and even their geographic location.  We are proactively investigating mobile apps in order to protect consumers and their privacy.”

The State’s lawsuit, filed in federal court against Los Angeles-based 24x7digital LLC and its owners and operators, Mark Yamashita and Rei Yoshioka, is the first filed by the State Division of Law pursuant to the federal Children’s Online Privacy Protection Act (COPPA).  It is also the first suit filed as a result of the Division of Consumer Affairs’ ongoing initiative against Internet privacy violations and acts of cyber-fraud.

“The defendants agreed to change their practices, remove data analytics from their apps, and destroy all collected information, almost immediately upon the filing of our lawsuit,” Eric T. Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said.  “We are glad to acknowledge their willingness to come into compliance with federal privacy law, and we hope and expect that any other app companies unlawfully sharing users’ information will follow suit.”

24x7 and its operators have warranted that, as a result of the State’s lawsuit, they have already stopped collecting personal data from the users of their popular apps, and that they have destroyed all personal data the company previously collected in violation of COPPA. The company has also directed the third-party data analytics company, to which it transmitted children’s personal information, to destroy that information.

In addition, 24x7 is prohibited under the Consent Decree from collecting or transmitting children’s personal information in the future, without providing notice on its website or in its apps about the types of information to be collected and the ways it is to be used; without directly notifying parents; and without obtaining verifiable parental consent.

According to the State’s complaint, filed June 6, 2012 in U.S. District Court, District of New Jersey, children who use 24x7’s popular series of “TeachMe” apps were encouraged by 24x7 to provide their first and last names, and a picture of themselves, when creating player profiles. 

Division of Consumer Affairs investigators found that the apps allegedly transmitted personal information – including the first and last names provided by users, as well as the unique device identification number (UDID) that identifies the specific mobile device a player is using – to a third-party data analytics company (see the press release: www.njconsumeraffairs.gov/press/662012.htm). 

Attorney General Chiesa noted that the Division of Consumer Affairs is continuing its investigation into other mobile applications and their possible unlawful sharing of users’ private information. 

Investigators Aziza Salikhov and Brian Morgenstern, of the Division of Consumer Affairs’ Cyber Fraud Unit, led this investigation.  Deputy Attorney General Jah-Juin Ho, along with Deputies Glenn Graham and Joan Karn, all of the Division of Law, Affirmative Civil Enforcement Practice Group, are representing the State in this matter.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.

Follow the Division of Consumer Affairs on Facebook and check our online calendar of upcoming Consumer Outreach events at www.NJConsumerAffairs.gov/outreach/.

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