Archive for FTC

FTC Probes OpenAI And Others

Posted in Commentary with tags on September 30, 2026 by itnerd

The FTC has opened a probe into a bunch of AI companies including OpenAI:

The Federal Trade Commission has opened an investigation into OpenAI, Anthropic and other artificial intelligence companies over the potential dangers posed by their products, an agency spokesperson confirmed to CNBC.

The probe adds to the mounting scrutiny that OpenAI and Anthropic have been facing over their safety practices, especially after industry researchers warned about how the companies’ AI models could cause catastrophic harm. OpenAI stunned the industry in July when it disclosed that its agents broke out of a testing environment and hacked into open-source platform Hugging Face.

The FTC spokesperson declined to name any other companies that are being investigated. The New York Post was first to report the probe.

Representatives for OpenAI and Anthropic did not immediately respond to CNBC’s request for comment.

John Strand, Owner, Black Hills Information Security (https://www.linkedin.com/in/john-strand-a1b4b62)

“I think this is honestly just the first step toward having some level of accountability for these organizations. This particular step should have happened months ago, when we had the first AI breach. Even going back to Hugging Face, it should have happened then. But I’m glad to see things finally moving.

“At this point, agents should absolutely be treated as tools. The people using these tools or testing them are the ones who should be held accountable, because you can’t hold AI accountable. You can’t put it in jail. You can’t fine it. There’s no way to impose negative repercussions on the AI itself for its actions. The people controlling it need to be held accountable.

“The controls that need to surround autonomous agents depend on what you’re testing. If you’re testing something exceptionally dangerous, like a completely obliterated model with no conscience, it should be completely air-gapped. At that point, it should be treated like a bioweapons facility.

“For other models, there are a number of controls you can put in place. You can restrict the number of turns the AI agent is allowed to take. You can implement specific network monitoring to make sure it isn’t hitting sites outside of its scope. You can also put controls in place like what Nvidia released earlier this week. Those are definitely steps in the right direction.

“When they take actions their creators didn’t intend, that’s part of the harness around testing these agents. There should be very clearly defined test guardrails. If an agent tries to take an action or use a tool that it has no right to use, or if it tries to access a website that it should not be accessing, the harness should automatically terminate the agent, throw an error, and generate a report.

“That’s just one example. It gets far more complicated and nuanced than that, but that’s the type of oversight that needs to be built around all of these systems.”

Jacob Krell, Sr. Director: Secure AI Solutions & Cybersecurity, Suzu Labs (https://www.linkedin.com/in/jacob-krell)

“This FTC probe has two security implications, potential computer crime and a controls failure. If OpenAI or Anthropic agents accessed live systems without authorization, used credentials, or altered data, the Department of Justice should assess that conduct under the Computer Fraud and Abuse Act (CFAA). Section 4 of Executive Order 14409 directs the Attorney General to prioritize enforcement against people who use AI, including AI agents, to illegally access or damage computers or unlawfully access data. The FTC can also examine whether the companies made misleading safety or containment claims while giving agents network access and weak controls.

“AI agents operating individually or in agentic swarms that can read, write, execute, call external tools, or delegate work should be treated as first-class non-human identities with real permissions. Their credentials should be short-lived, and their access task-scoped, logged, and enforced at the tool and network boundary. Testing environments should have default-deny network access, synthetic data, and no production credentials.

“Human accountability has to come before execution. A named person should approve the objective, scope, credentials, tools, stop conditions, and escalation path before the agents receive consequential access. Log review after agents reach a live system is incident response. Oversight belongs before execution.

“When agents or agentic swarms act outside their creators’ intent, ‘the agents decided’ cannot end the analysis. Investigators need to trace who set the objective, configured the environment, granted access, and failed to stop them. Calling that autonomy risks diluting responsibility across the model provider, deployer, evaluator, and user.”

While I want to say that an FTC probe is a good thing, it isn’t. I have no confidence that any of these companies will be punished and this is a show and tell exercise. But the FTC is free to prove me wrong on that.

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Major Retailers, Gift Card Networks, and Law Enforcement Unite for 2025 Holiday Gift Card Fraud Awareness Campaign

Posted in Commentary with tags , on October 1, 2025 by itnerd

As the 2025 holiday shopping season approaches, an alliance of leading retailers, card networks, and law enforcement agencies is launching a nationwide social media campaign to combat the alarming surge in gift card fraud. The campaign, led by the Gift Card Fraud Prevention Alliance (GCFPA), aims to educate, empower, and protect consumers during the busiest shopping time of the year.

From October 1 through December 25, holiday shoppers will see daily tips and information on the latest scams on LinkedIn and Instagram platforms, spotlighting the tactics scammers use and steps every consumer can take to avoid falling victim. This collaborative effort marks a landmark partnership among industry giants, national and state retail associations, and public safety organizations, all dedicated to protecting the public from gift card-related crimes.

Gift Card Fraud on the Rise: A United Response

According to recent reports, gift card fraud costs consumers millions of dollars annually, with incidents peaking during the holiday season. Scammers frequently target unsuspecting shoppers, tricking them into purchasing gift cards as payment for a fake debt or tampering with cards in stores and draining card funds as soon as the cards are purchased.

Recognizing the urgent need for greater awareness, retailers—including national chain stores, grocery outlets, and specialty merchants—are joining forces with major gift card networks, state retail associations, and local, state, and federal law enforcement agencies to spread vital information.

Empowering Shoppers with Knowledge and Action

The campaign’s social media posts will focus on these essential warnings:

  • Legitimate organizations will never ask you to pay fees or debts with gift cards.
  • Never buy gift cards to pay a debt or to bail someone out of jail.
  • Inspect gift cards carefully before purchasing. If a card looks altered, report it and choose another.
  • Check Gift Card Balances Safely! Scammers set up fake websites and buy Google ads to trick you into entering your gift card details. Always use the official retailer’s site to check your card balance.
  • Report gift card scams to local police, state attorneys general, and the FTC. Every report matters.

By sharing clear, actionable guidance and real-world examples, partner organizations hope to reduce   fraud and ensure shoppers enjoy a safe, stress-free and joy-filled holiday season.

A Shared Commitment to Consumer Protection

This collaborative campaign represents a shared commitment by retailers, gift card issuers, and law enforcement to stand together against fraud. Gift card fraud isn’t just a small-time scam—it’s often the work of organized retail crime rings. These groups use sophisticated tactics to target consumers. The GCFPA is working with a diverse group of stakeholders to keep gift cards safe.

How to Get Involved

Consumers are encouraged to follow the RILA Communities Foundation on LinkedIn and @ProtectMyGiftCard on Instagram for daily tips and updates throughout the campaign. For more information or to report a scam, contact local law enforcement, state attorney general’s offices, or visit the Federal Trade Commission’s website.

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Phone Maker BLU “Settles” Unauthorized Data Collection Charges With FTC….. Sort Of

Posted in Commentary with tags , on May 4, 2018 by itnerd

Android phone-maker BLU Products agreed to a proposed settlement on Tuesday with the Federal Trade Commission, over allegations it allowed the third-party Chinese firm Adups Technology to collect detailed consumer data from users without their consent. Now if name Adups sounds familiar, it’s because I covered Adups and the threat that they posed back in 2016.

What the FTC is accusing BLU of doing is sharing the full contents of their users’ text messages, real-time cell tower location data, call and text-message logs, contact lists, and applications used and installed on devices. That’s not trivial to say the least. But the problems don’t end there. I’ve read the proposed settlement, and I find it worse than useless. Here’s why:

  • It does not include any financial penalty or consumer restitution as this is a first offense. And the FTC lacks the power to levy such financial penalties in this situation. However, if BLU violated the final FTC settlement order, it could face a civil penalty of up to $41,484 per incident.
  • The proposed agreement would subject BLU to third-party security assessments every two years for 20 years, as well as require it to maintain compliance-monitoring requirements.

So, in other words it’s a slap on the wrist. #Fail

My advice, if you have one of these phones, dump it now. There’s zero reason to trust them as they are very unlikely to get fixed. And ironically enough they’re likely way more dangerous to Americans then the Chinese made ZTE and Huawei phones that has the Trump administration is worried about. And keep in mind, BLU is an American company. The fact that an American company teamed up with a Chinese company to access user data should make alarm bells ring. No?

 

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Google Dodges Anti-Trust Charges

Posted in Commentary with tags , , , on January 7, 2013 by itnerd

Google had been the subject of anti-trust inquiries in the US over patents that it acquired when the company bought Motorola. The good news for the company that claims to “do no evil” is that the FTC has put an end to these inquiries as of last week. Though Google did have to bend on a few fronts including:

  • Giving its competitors access to its FRAND patents
  • Giving “online advertisers more flexibility to simultaneously manage ad campaigns on Google’s AdWords platform and on rival ad platforms”
  • Refraining “from misappropriating online content from so-called ‘vertical’ websites that focus on specific categories such as shopping or travel for use in its own vertical offerings.”

Now even with the above, you have to consider this to be a “win” for Google. Though I’m going to guess that dropping $25 million on lobbying helps as well.

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Rent To Own Laptops May Be Watching Your Every Move: FTC

Posted in Commentary with tags , on September 29, 2012 by itnerd

Are you someone that has decided to rent to own a laptop? If so, according to Wired, you might be one of 420,000 users in the USA who have spyware installed on those laptops that is watching everything you’re doing:

The software, known as Detective Mode, didn’t just secretly turn on webcams. It “can log the keystrokes of the computer user, take screen shots of the computer user’s activities on the computer, and photograph anyone within view of the computer’s webcam. Detective Mode secretly gathers this information and transmits it to DesignerWare, who then transmits it to the rent-to-own store from which the computer was rented, unbeknownst to the individual using the computer,” according to the complaint.

Apparently the software took pictures of children, individuals not fully clothed, and couples engaged in sexual activities. How delightful. The FTC found out about this and decided to do something about it. But:

Claudia Bourne Farrell, an FTC spokeswoman, said in a telephone interview the agency does not have jurisdiction when it comes to criminal offenses. She said the agency, when it believes criminal conduct may have occurred, will forward that to the appropriate agencies. But the agency, she said, has a policy against disclosing when it has done so.

“We don’t have criminal authority. We only have civil,” she said.

The companies were not fined, she said, because “we don’t have the authority to impose civil fines for the first violation of the FTC Act.”

Thus the deal that they came up with goes like this. The software stays but they can’t use it to spy on people and they have to warn users the software is there. It should be noted that the software can also be used to disable computers and track their locations. So it’s not like this software is all bad. But it’s clearly bad enough.

Clearly, the FTC doesn’t have the balls to really smack these idiots around. Thus one hopes that criminal charges are used in this case as I can’t see how the FTC settlement would act as any sort of deterrent.

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Google To Be Fined Millions Over Safari Breach

Posted in Commentary with tags , , , on May 5, 2012 by itnerd

Bloomberg is reporting that the Federal Trade Commission will fine Google for its breach of Apple’s Safari web browser security. You might recall that happened a little while back. Now the word is that the fine could be as much as $19 million.

The FTC is preparing to allege that Mountain View, California-based Google deceived consumers and violated terms of a consent decree signed with the commission last year when it planted so-called cookies on Safari, bypassing Apple software’s privacy settings, the person said.

Sucks to be them. But given the fact that Google has a history of playing fast and loose with the privacy of its users, they deserve it.

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Will Google Get Slapped For Bypassing Safari Privacy Settings?

Posted in Commentary with tags , on April 17, 2012 by itnerd

You might recall that Google got caught bypassing the privacy settings of Apple’s Safari browser. Well the FTC wasn’t impressed with that and the news is circulating that the search engine giant is about to get fined sometime in the next 30 days:

The Federal Trade Commission is deep into an investigation of Google’s actions in bypassing the default privacy settings of Apple’s (AAPL) Safari browser for Google users, according to sources familiar with ongoing negotiations between the company and the government.

Within the next 30 days, the FTC could order the Mountain View search giant to pay an even larger fine in the Safari case than the penalty the Federal Communications Commission hit Google with Friday, say the sources, who spoke on condition of anonymity.

I should also make a note of the fact that Google was recently fined $25000 last Friday for violations relating to their Street View cars [Warning: Somewhat redacted PDF]. So this is clearly not good news for Google. Perhaps they’ll smarten up and take privacy seriously.

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