WASHINGTON, D.C. — The Federal Trade Commission (FTC) has reached a $650,000 settlement with VTech Electronics to settle charges that the electronic toy manufacturer violated U.S. children's privacy laws.

The FTC has announced a settlement with VTech, which was charged with collecting personal information from children without parental consent or giving direct notice and for failing to secure the data it collected.

VTech was charged by the FTC for allegedly using its Kid Connect app with some of the company's electronic toys to collect personal information of hundreds of thousands of children. According to the FTC, VTech did not provide notice to parents or obtain verifiable consent from the parents about the collection of personal information which is a violation of the Children's Online Privacy Protection Act (COPPA).

“As connected toys become increasingly popular, it’s more important than ever that companies let parents know how their kids’ data is collected and used and that they take reasonable steps to secure that data,” acting FTC chairwoman Maureen K. Ohlhausen said in a news release. “Unfortunately, VTech fell short in both of these areas.”

As part of the settlement with the FTC, VTech will also be permanently prohibited from further COPPA violations and from misrepresenting its security and privacy practices. The company must also design a comprehensive data security program subject to 20 years of independent audits. 

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