Home > Personal Finance > Do Some Toys Threaten Your Child’s Privacy?

Comments 0 Comments

Is Santa spying on your kids?

A set of consumer groups think so and are petitioning the Federal Trade Commission to step in on Tuesday.

In a broader report accompanying the complaint, consumer groups are warning that a coming “Internet of Toys” could have long-term implications for child safety.

“Product safety is no longer just about a small toy that you are afraid your kid will choke on,” said Jeffrey Chester, executive director of the Center for Digital Democracy. “It’s about how the products are designed and what they might be doing with your children’s information.”

Two hot new internet-connected toys “subject young children to ongoing surveillance … and pose an imminent and immediate threat to the safety and security of children,” the complaint alleges.

The two toys — one doll named My Friend Cayla, marketed to girls, and i-Que, which targets boys — are made by a Chinese company, Genesis Toys, which has a Los Angeles-based affiliate named Genesis.

iQue and Cayla engage in simulated conversations with children. They use Bluetooth to connect to smartphones and gain access to the internet.

“A child’s statements are converted into text, which is then used by the application to retrieve answers using Google Search, Wikipedia and Weather Underground,” the complaint says.

The toys are available from many U.S. retailers. On one product page, they are described as being appropriate for children ages 3 to 12.

“Via speech-recognition technology, Cayla can understand and respond to your child in real time about almost anything,” the page says. “She can tell stories, play games, share photos from her photo album, and can sing too. She can even help your child with their homework questions.”

The consumer groups — including the Electronic Privacy Information Center, The Campaign for a Commercial Free Childhood and Consumers Union — claim that the devices record children’s conversations “without any limitations on collection, use or disclosure” of personal information. They say the Genesis toys violate the Child Online Protection Act, and that the Federal Trade Commission should step in immediately.

Genesis Toys claims that My Friend Cayla has amassed over 1 million fans worldwide, according to the complaint.

Attempts to reach Genesis for comment were unsuccessful.

Massachusetts-based Nuance Communications, which provides voice-recognition services for the toys, according to the complaint, was also named. Emails and phone calls to the firm were not immediately returned.

Too Much Personal Information? 

The complaint alleges that the toys ask for personal information, such as parents’ names, favorite TV show, school name and home city. The Genesis privacy policy — only available as a pop-up when downloading an app — says all data can be stored and shared with certain third parties, according to the complaint.

The consumer groups also say the toys don’t employ basic Bluetooth security, such as requiring a pairing code.

“As a result, when the Cayla and i-Que dolls are powered on and not already paired with another device, any smartphone or tablet within a 50-foot range can establish a Bluetooth connection with the dolls,” it says. That opens the door to strangers in close proximity being able to use the doll to connect with the child who’s using it, the groups allege.

Last year, Mattel’s release of the Hello Barbie talking toy raised similar concerns, particularly after researchers were able to hack it. Mattel addressed that concern by offering a bug bounty program with its voice-processing partner, ToyTalk.

In a report named Toyfail by European consumer group Norwegian Consumer Council timed to coincide with the U.S. FTC complaint, Mattel scored well in terms of privacy policy disclosures and minimization of data collection. Hello Barbie doesn’t connect to the internet to supply conversation; it relies on pre-programmed dialogue. But recordings of conversations are sent to ToyTalk.

ToyTalk’s privacy policy says those recordings are used to refine its voice-processing service and are not used to contact or market to children.

Still, Josh Golin of Commercial Free Childhood told Credit.com that parents need to be aware of these new kinds of toys.

“These are becoming must-have toys,” he said. “And these problems are ongoing. Sure, there was a splash made when someone hacked the toy, but then it goes away. This issue needs to be front and center for parents.”

The report from the EU group noted that while Hello Barbie’s terms and conditions were written in clear language and are available online — in contrast to Genesis toys — it was critical of Mattel for not explaining how changes to the privacy policy would be announced and for not being clear about what third parties might receive collected data.

“Hello Barbie and ToyTalk only state that they can share data with ‘vendors, consultants and other service providers’ without specifying or giving examples of what this entails,” the report says.

Marissa Beck, a spokeswoman for Mattel, objected to the European group’s criticism of its third-party data sharing notice.

“We have an entire section (in our privacy policy) that details this, called “What Information Do We Share With Third Parties?,” she said, pointing to the Hello Barbie policy on ToyTalk.com’s website. She also said the firm is clear about updates to the policy.

In an email, Jade McNorton, a spokesperson for ToyTalk maker, San Francisco-based Pullstring Inc., said “we feel this is clearly communicated” when asked about updates to the firm’s privacy policy, and pointed to this section of it:

If we make changes, we will notify you by revising the date at the top of the Privacy Policy and, in some cases (such as for material changes), we will provide you with additional notice (such as adding a statement to our web site’s homepage or sending you a notification) and/or obtain your prior verifiable consent.

She added that third-party firms which might receive data are detailed in the privacy policy also.

Should Parents Be Concerned?

Fundamentally, these types of toys are “not great to begin with,” Golin said. (Real friends are superior to talking dolls that can mimic friendly conversations). But parents should be concerned that while kids are being trained to “connect with toys, and really confide in them,” there are longer-term concerns, Golin said.

“I think what happens is there is a rush to get things into the marketplace before the technology and policy and ethical considerations have all been worked out …There’s this misguided idea that connecting anything to the Internet makes it better. With toys, there’s all sorts of reasons you don’t want to do that,” Golin said. “The issues are really sensitive. The recordings of children’s conversations are really sensitive. And the fact that these companies can’t explicitly say, ‘This is exactly what we are doing with these recordings,’ should be very concerning to parents.”

“These discoveries are another sign that emerging IoT-technologies may not be well suited for children’s products,” the Norwegian Consumer Council concludes. “Unless the manufacturers and service providers are willing to take these issues seriously, the NCC are concerned that the area of connected toys is rife with potential risks for children’s safety and well-being, as they play and interact with these products.”

Remember, you can keep an eye out for identity theft by monitoring your credit. (You can pull your credit reports for free each year at AnnualCreditReport.com and view two of your scores, updated every 14 weeks, for free on Credit.com.) Parents can request a credit history for their minor children from the three credit reporting agencies with documentation proving they are the parent or legal guardian to keep an eye out for child identity theft as well.

Image: FatCamera

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team