Mobile Phone Maker Reaches Settlement With FTC Over Deceptive Privacy And Data Security Claims

Mobile phone manufacturer Blue Products, Inc. and its co-owner and President, Samuel Ohev-Zion (collectively, "BLU"), reached a settlement with the Federal Trade Commission ("FTC") over allegations that BLU misled consumers by allowing a China-based third party to collect detailed personal information about consumers.  The FTC alleged that the Chinese entity collected U.S. consumers text message content, real-time location information, call logs, and contact lists, without consumers' knowledge or consent, despite promises by BLU that it would keep such information private and secure.

The FTC alleged that BLU (i) mislead consumers by falsely claiming it limited third-party collection of data from users of BLU's devices to only information needed, and (ii) failed to implement appropriate physical, electronic and managerial procedures to protect consumer's personal information, including failing to perform due diligence of service providers, failing to have written data