UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

__________________________________________

 )

In the Matter of ) FILE NO.

 )

ACRAnet, INC., ) AGREEMENT CONTAINING 

a corporation. ) CONSENT ORDER

 )

___________________________________________)

 

The Federal Trade Commission (“Commission”) has conducted an investigation of

certain acts and practices of ACRAnet, Inc. (“ACRAnet”) (“proposed respondent”). Proposed

respondent, having been represented by counsel, is willing to enter into an agreement containing

a consent order resolving the allegations contained in the attached draft complaint. Therefore,

IT IS HEREBY AGREED by and between ACRAnet and counsel for the Federal Trade

Commission that:

1. Proposed respondent ACRAnet, Inc. is a Nevada corporation with its principal office or

place of business at 521 W. Maxwell, Spokane, Washington 99201. 

2. Proposed respondent admits all the jurisdictional facts set forth in the draft complaint.

3. Proposed respondent waives:

(a) any further procedural steps;

(b) the requirement that the Commission’s decision contain a statement of findings of

fact and conclusions of law; and

(c) all rights to seek judicial review or otherwise to challenge or contest the validity

of the order entered pursuant to this agreement.

4. This agreement shall not become part of the public record of the proceeding unless and

until it is accepted by the Commission. If this agreement is accepted by the Commission,

it, together with the draft complaint, will be placed on the public record for a period of

thirty (30) days and information about it publicly released. The Commission thereafter

may either withdraw its acceptance of this agreement and so notify proposed respondent,

in which event it will take such action as it may consider appropriate, or issue and serve

its complaint (in such form as the circumstances may require) and decision in disposition

of the proceeding.
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5. This agreement is for settlement purposes only and does not constitute an admission by

proposed respondent that the law has been violated as alleged in the draft complaint, or

that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.

6. This agreement contemplates that, if it is accepted by the Commission, and if such

acceptance is not subsequently withdrawn by the Commission pursuant to the provisions

of Section 2.34 of the Commission’s Rules, the Commission may, without further notice

to proposed respondent, (1) issue its complaint corresponding in form and substance with

the attached draft complaint and its decision containing the following order in disposition

of the proceeding, and (2) make information about it public. When so entered, the order

shall have the same force and effect and may be altered, modified, or set aside in the

same manner and within the same time provided by statute for other orders. The order

shall become final upon service. Delivery of the complaint and the decision and order to

proposed respondent’s address as stated in this agreement by any means specified in

Section 4.4(a) of the Commission’s Rules shall constitute service. Proposed respondent

waives any right it may have to any other manner of service. The complaint may be used

in construing the terms of the order. No agreement, understanding, representation, or

interpretation not contained in the order or the agreement may be used to vary or

contradict the terms of the order.

7. Proposed respondent has read the draft complaint and consent order. Proposed

respondent understands that it may be liable for civil penalties in the amount provided by

law and other appropriate relief for each violation of the order after it becomes final.

ORDER

DEFINITIONS

For purposes of this Order, the following definitions shall apply:

1. “Personal information” shall mean individually identifiable information from or about an

individual consumer including, but not limited to: (a) a first and last name; (b) a home or

other physical address, including street name and name of city or town; (c) an email

address or other online contact information; (d) a telephone number; (e) a Social Security

number; (f) a credit card or debit card account number; (g) checking account information;

(h) a driver’s license, military or state identification number; (i) a persistent identifier,

such as a customer number that is combined with other available data that identifies an

individual consumer; or (j) any information that is combined with any of (a) through (i)

above.

2. “Gramm-Leach-Bliley Act” or “GLB Act” refers to 15 U.S.C. §§ 6801-6809, as

amended, and the “Safeguards Rule” or the “Standards for Safeguarding Customer

Information Rule” refers to 16 C.F.R. Part 314, issued pursuant to Title V, Subtitle A of

the GLB Act, 15 U.S.C. §§ 6801-6809.
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3. “Financial institution” shall mean as defined in Section 509(3)(A) of the GLB Act, 15

U.S.C. § 6809(3)(A).

4. “The Fair Credit Reporting Act” or “FCRA” refers to 15 U.S.C. § 1681 et seq.

5. “Consumer report” shall mean as defined in Section 603(d)(1) of the FCRA, 15 U.S.C. 

§ 1681a(d)(1). 

6. Unless otherwise specified, “respondent” shall mean ACRAnet, Inc. and its subsidiaries,

divisions, affiliates, successors and assigns. 

7. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act,

15 U.S.C. § 44.

I.

IT IS ORDERED that respondent shall, no later than the date of service of this order,

establish and implement, and thereafter maintain, a comprehensive information security program

that is reasonably designed to protect the security, confidentiality, and integrity of personal

information collected from or about consumers, including the security, confidentiality, and

integrity of personal information accessible to end users. Such program, the content and

implementation of which must be fully documented in writing, shall contain administrative,

technical, and physical safeguards appropriate to respondent’s size and complexity, the nature

and scope of respondent’s activities, and the sensitivity of the personal information collected

from or about consumers. The information security program must include: 

A. the designation of an employee or employees to coordinate and be

accountable for the information security program;

B. the identification of material internal and external risks to the security,

confidentiality, and integrity of personal information that could result in

the unauthorized disclosure, misuse, loss, alteration, destruction, or other

compromise of such information, and assessment of the sufficiency of any

safeguards in place to control these risks. At a minimum, this risk

assessment should include consideration of risks in each area of relevant

operation, including, but not limited to: (1) employee training and

management; (2) information systems, including network and software

design, access, information processing, storage, transmission, and

disposal; and (3) prevention, detection, and response to attacks, intrusions,

or other systems failures;

C. the design and implementation of reasonable safeguards to control the

risks identified through risk assessment and regular testing or monitoring

of the effectiveness of the safeguards’ key controls, systems, and

procedures;
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D. the development and use of reasonable steps to select and retain service

providers capable of appropriately safeguarding personal information they

receive from the respondent, and requiring service providers by contract to

implement and maintain appropriate safeguards; and

E. the evaluation and adjustment of respondent’s information security program in

light of the results of the testing and monitoring required by sub-Part C, any

material changes to respondent’s operations or business arrangements, or any

other circumstances that respondent knows or has reason to know may have a

material impact on the effectiveness of its information security program. 

 II.

IT IS FURTHER ORDERED that respondent and its officers, agents, representatives,

and employees, shall not, directly or through any corporation, subsidiary, division, website, or

other device, violate any provision of the Safeguards Rule, 16 C.F.R. Part 314. In the event that

this Rule is hereafter amended or modified, respondent’s compliance with that Rule as so

amended or modified shall not be a violation of this order.

 III

IT IS FURTHER ORDERED that respondent, in connection with the compilation,

creation, sale, or dissemination of any consumer report shall:

A. Furnish such consumer report only to those persons which it has reason to believe

have a permissible purpose as described in Section 604(a)(3) of the Fair Credit

Reporting Act, 15 U.S.C. § 1681b(a)(3), or in such other circumstances as set

forth in Section 604 of the Fair Credit Reporting Act, 15 U.S.C. § 1681b; and

B. Maintain reasonable procedures to limit the furnishing of such consumer report to

those with a permissible purpose and ensure that no consumer report is furnished

to any person when there are reasonable grounds to believe that the consumer

report will not be used for a permissible purpose, as required by Section 607(a) of

the Fair Credit Reporting Act, 15 U.S.C. § 1681e(a). 

IV.

IT IS FURTHER ORDERED that respondent shall, in connection with its compliance

with Part I of this order, obtain initial and biennial assessments and reports (“Assessments”)

from a qualified, objective, independent third-party professional, who uses procedures and

standards generally accepted in the profession. Each Assessment shall be prepared and

completed within sixty (60) days after the end of the reporting period to which the Assessment

applies by a person qualified as a Certified Information System Security Professional (CISSP) or

as a Certified Information Systems Auditor (CISA); a person holding Global Information

Assurance Certification (GIAC) from the SysAdmin, Audit, Network, Security (SANS) Institute;
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or a similarly qualified person or organization approved by the Associate Director for

Enforcement, Bureau of Consumer Protection, 600 Pennsylvania Avenue NW, Federal Trade

Commission, Washington, D.C. 20580. The reporting period for the Assessments shall cover:

(1) the first one hundred and eighty (180) days after service of the order for the initial

Assessment, and (2) each two (2) year period thereafter for twenty (20) years after service of the

order for the biennial Assessments. Each Assessment shall:

A. set forth the specific administrative, technical, and physical safeguards that

respondent has implemented and maintained during the reporting period;

B. explain how such safeguards are appropriate to respondent’s size and complexity,

the nature and scope of respondent’s activities, and the sensitivity of the personal

information collected from or about consumers;

C. explain how the safeguards that have been implemented meet or exceed the

protections required by the Safeguards Rule; and

D. certify that respondent’s security program is operating with sufficient effectiveness

to provide reasonable assurance that the security, confidentiality, and integrity of

personal information is protected and has so operated throughout the reporting

period.

Respondent shall provide the initial Assessment to the Associate Director for Enforcement,

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,

Washington, D.C. 20580, within ten (10) days after the Assessment has been prepared. All

subsequent biennial Assessments shall be retained by respondent until the order is terminated and

provided to the Associate Director of Enforcement within ten (10) days after respondent receives

such request.

V.

IT IS FURTHER ORDERED that respondent shall maintain, and upon request make

available to the Federal Trade Commission for inspection and copying: 

A. for a period of five (5) years, a print or electronic copy of each document relating

to compliance, including but not limited to documents, prepared by or on behalf of

respondent, that contradict, qualify, or call into question respondent’s compliance

with this order;

B. for a period of five (5) years, copies of all subpoenas and other communications

with law enforcement entities or personnel, whether in written or electronic form,

if such documents bear in any respect on respondent’s collection, maintenance, or

furnishing of consumer reports or other personal information of consumers; and

C. for a period of three (3) years after the date of preparation of each Assessment
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required under Part IV of this order, all materials relied upon to prepare the

Assessment, whether prepared by or on behalf of the respondent, including but not

limited to all plans, reports, studies, reviews, audits, audit trails, policies, training

materials, and assessments, and any other materials relating to the respondent’s

compliance with Parts I and II of this order, for the compliance period covered by

such Assessment. 

VI.

IT IS FURTHER ORDERED that for a period of five (5) years from the date of entry of

this Order, respondent shall deliver copies of the Order as directed below:

A. Respondent must deliver a copy of this Order to (1) all current and future

principals, officers, directors, and managers, (2) all employees, agents and

representatives who engage in conduct related to the subject matter of the Order,

and (3) any business entity resulting from any change in structure set forth in Part

VII. For current personnel, delivery shall be within five (5) days of service of this

Order. For new personnel, delivery shall occur prior to them assuming their

responsibilities. For any business entity resulting from any change in structure set

forth in Part VII, delivery shall be at least ten (10) days prior to the change in

structure.

B. Respondent must secure a signed and dated statement acknowledging receipt of

this Order, within thirty (30) days of delivery, from all persons receiving a copy of

the Order pursuant to this section.

 

VII.

IT IS FURTHER ORDERED that respondent shall notify the Commission at least thirty

(30) days prior to any change in the corporation that may affect compliance obligations arising

under this order, including, but not limited to, a dissolution, assignment, sale, merger, or other

action that would result in the emergence of a successor corporation; the creation or dissolution of

a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the

proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided,

however, that with respect to any proposed change in the corporation about which respondent

learns less than thirty (30) days prior to the date such action is to take place, respondent shall

notify the Commission as soon as is practicable after obtaining such knowledge. Unless

otherwise directed by a representative of the Commission, all notices required by this Part shall

be sent by overnight courier (not the U.S. Postal Service) to the Associate Director of

Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania

Avenue NW, Washington, D.C. 20580, with the subject line FTC v. ACRAnet, Inc. Provided,

however, that, in lieu of overnight courier, notices may be sent by first-class mail, but only if an

electronic version of such notices is contemporaneously sent to the Commission at

DEbrief@ftc.gov.
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VIII.

IT IS FURTHER ORDERED that respondent, and its successors and assigns, within

sixty (60) days after the date of service of this order, shall file with the Commission a true and

accurate report, in writing, setting forth in detail the manner and form of their own compliance

with this order. Within ten (10) days of receipt of written notice from a representative of the

Commission, they shall submit additional true and accurate written reports.

IX.

This order will terminate twenty (20) years from the date of its issuance, or twenty (20)

years from the most recent date that the United States or the Federal Trade Commission files a

complaint (with or without an accompanying consent decree) in federal court alleging any

violation of the order, whichever comes later; provided, however, that the filing of such a

complaint will not affect the duration of:

A. any Part in this order that terminates in less than twenty (20) years;

B. this order’s application to any respondent that is not named as a defendant in such

complaint; and

C. this order if such complaint is filed after the order has terminated pursuant to this

Part.

Provided, further, that if such complaint is dismissed or a federal court rules that respondent did

not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld

on appeal, then the order will terminate according to this Part as though the complaint had never

been filed, except that the order will not terminate between the date such complaint is filed and

the later of the deadline for appealing such dismissal or ruling and the date such dismissal or

ruling is upheld on appeal.
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Signed this __________day of _____________________________ , 2010.

ACRAnet, INC.

By:______________________________________

NICK WARRICK

President

Lukins & Annis, P.S.

By:_________________________

JED W. MORRIS

Counsel for ACRAnet, Inc.
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FEDERAL TRADE COMMISSION

By:____________________________________

ANTHONY RODRIGUEZ

KATHERINE WHITE

Counsel for the Federal Trade Commission

APPROVED:

________________________________

REBECCA E. KUEHN

Assistant Director

Division of Privacy & Identity Protection

_________________________________ _______________________________________ 

MANEESHA MITHAL DAVID C. VLADECK

Associate Director Director

Division of Privacy & Identity Protection Bureau of Consumer Protection