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SettlementLow Risk

NJ Division of Consumer Affairs Settles with DealerApp Over Unauthorized Data Sharing for $38K

DealerAppSeptember 9, 2015New Jersey Attorney General

Penalty Amount

$38,000

Summary

The New Jersey Division of Consumer Affairs settled with DealerApp, a mobile app developer for auto dealerships, for allegedly collecting and transmitting consumer personal information without notice or consent. DealerApp agreed to pay a $38,000 civil penalty and implement measures to disclose data practices and obtain consent for third-party sharing.

Remedy

DealerApp must pay a $38,000 civil penalty, clearly disclose data collection practices in privacy policies, disclose use of third-party analytics, and not transfer personal information without consumer consent or opt-out mechanism.

Monetary PenaltyInjunctionCompliance ProgramCorrective Notice

Contract Impact

In-house legal teams should review vendor agreements between DealerApp and auto dealerships, as well as any end-user license agreements or terms of service presented to consumers via the apps. Key clauses to scrutinize include data sharing provisions (especially transmission to third-party analytics companies), consent mechanisms for collecting and sharing personal information, privacy policy disclosure requirements, and data processing obligations. Changes will likely be needed to mandate clear, conspicuous disclosure of all data recipients (including DealerApp itself), implement robust opt-in consent for third-party sharing, and ensure dealership clients are fully informed of the data flows they are authorizing. Agreements may also require amendments to align with specific state-level privacy notice and consent standards.

Contract Search Terms

data sharing agreementconsent mechanismprivacy policy disclosurethird-party data sharingdata processing addendumnotice of data collectionopt-out mechanismdata retention schedulepersonal information definitionvendor data obligations

Laws Cited

New Jersey Consumer Fraud ActNew Jersey Computer-Related Offenses Act

Violation Types

Entity Details

Entity

DealerApp

Industry

Technology

Official Sources

Source Evidence

Entity Name
"DealerApp develops apps that are customized for each auto dealership"
Fine Amount
"of which $38,000 is a civil penalty"
Laws Cited
"in violation of the New Jersey Consumer Fraud Act."
Laws Cited
"The Division of Consumer Affairs enforces the New Jersey Consumer Fraud Act, the New Jersey Computer-Related Offenses Act"
Violation Types
"consumers who downloaded these apps were never informed that these apps transmitted personal information"
Violation Types
"transmitted certain information to third-party data analytics companies without disclosing this to consumers."

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