TRUSTe announced the termination of one of its sealholders, Classic Closeouts LLC, an action that included the successful resolution of hundreds of online complaints. To date, TRUSTe has helped over 200 consumers who were affected. TRUSTe is working to resolve the issues by managing and handling consumer complaints, and in some cases, helping to obtain refunds from irregular charges that were incurred on the Classic Closeouts Web site. In addition, by revoking its privacy seal, TRUSTe could keep hundreds of thousands of additional consumers that were on the Classic Closeouts mailing list from experiencing unauthorized credit card charges.
Classic Closeouts, an online shopping forum, sent an offer letter to a large number of its past customers, encouraging them to enroll in a promotion program. TRUSTe received Watchdog complaints regarding unauthorized charges from 238 consumers who reported that they were charged without authorization. When subscribers complained, the company neglected to issue reimbursements in a timely manner.
TRUSTe promptly suspended Classic Closeouts’ authorization to use the TRUSTe privacy seal. In addition, TRUSTe worked rapidly to ensure that Classic Closeouts refunded the charges in question and resolved any other privacy complaints. As a TRUSTe sealholder, the company failed to comply with various program requirements and did not execute reasonable security measures. Upon suspension, Classic Closeouts did not meet obligations to reinstate its sealholder status.
Sealholder termination occurs only after TRUSTe outlines steps necessary for the licensee to remedy violations and such steps are refused. To execute TRUSTe’s mission to build online trust, TRUSTe educates Web site operators to meet best practices in the industry for the collection and use of consumer information. In this case, Classic Closeouts met a portion of the company’s obligations to remedy problems found with their practices, but did not address all requirements.