Penalty Amount
$500,000
NGL Labs, LLC and its founders were sued by the FTC and Los Angeles DA for marketing an anonymous messaging app to children and teens, making false claims about AI content moderation, sending fake messages to boost engagement, and violating COPPA by collecting kids' data without parental consent. They must pay $5 million, with $500,000 as a civil penalty and $4.5 million for consumer redress, and are banned from offering the app to users under 18. The order requires age gates, data deletion, and prohibits false claims about AI and recurring charges.
NGL must pay $4.5 million in consumer redress and a $500,000 civil penalty, ban marketing to under 18, implement an age gate, delete personal data of under-13 users without parental consent, stop misrepresenting AI capabilities and message senders, obtain consent for recurring charges, and send reminders about subscriptions.
In-house legal teams should scrutinize all user-facing agreements, particularly Terms of Service, Privacy Policies, and Marketing Agreements that could involve minors. Specific clauses to review include: 1) Age verification and user representation warranties, ensuring robust age-gating mechanisms and prohibitions on users under 18. 2) Data collection and consent provisions, verifying compliance with COPPA's requirement for verifiable parental consent before collecting personal information from children under 13. 3) Marketing and advertising representations, especially any clauses that permit or reference AI-driven content moderation, engagement tactics, or messaging features—these must be removed or qualified to prevent deceptive claims. 4) Billing and subscription terms, ensuring clear, unambiguous disclosures about recurring charges and easy cancellation pathways, with specific safeguards against 'tricking' users into paid services. 5) Data retention and deletion protocols, mandating the deletion of personal information upon discovery that an account belongs to a minor. Required changes will likely involve adding enforceable age-gate requirements, integrating verified parental consent flows (e.g., via signed forms or credit card verification), removing all unsubstantiated AI efficacy claims, and implementing clear, standalone disclosures for any recurring fees.
Entity
NGL Labs, LLC
Also known as: NGL Labs
Industry
TechnologyOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-order-will-ban-ngl-labs-its-founders-offering-anonymous-messaging-apps-kids-under-18-halt
NGL Complaint
https://www.ftc.gov/system/files/ftc_gov/pdf/NGL-Complaint.pdf
NGL StipulationastoEntryofProposedConsentOrder
https://www.ftc.gov/system/files/ftc_gov/pdf/NGL-StipulationastoEntryofProposedConsentOrder.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"NGL Labs, LLC"
"a $500,000 civil penalty"
"Children’s Online Privacy Protection Act Rule (COPPA Rule)"
"Restore Online Shoppers’ Confidence Act"
"violated the Children’s Online Privacy Protection Act Rule (COPPA Rule)"
The FTC rescinded its 2021 Policy Statement on Breaches by Health Apps and Other Connected Devices, which had purported to apply the Health Breach Notification Rule to health apps and connected devices that collect consumer health information. The rescission follows the Commission's 2024 update to the Health Breach Notification Rule, which already covers health apps and connected devices like fitness trackers, and implements an executive order directing agencies to eliminate obsolete guidance documents. No company was charged or penalized; this is a deregulatory action.
$12.0M
The FTC alleged that payment processor Humboldt Merchant Services knowingly processed payments for more than 1,000 shell merchant entities serving as fronts for fraudulent companies engaged in unauthorized billing scams, despite red flags including chargeback rates nearly 10 times higher than card-brand thresholds. Under the proposed stipulated order filed in the U.S. District Court for the Eastern District of Michigan, Humboldt will pay $12 million for consumer redress and is permanently banned from processing payments for merchants with a heightened risk of potential fraud.
$4.8M
The FTC charged Canada-based payment processor Nuvei Corporation and its subsidiaries with knowingly processing payments for fraudulent merchants, including more than $30 million in payments for the Reimage tech support scam from 2017 to 2023, as well as merchants making false earnings claims and impersonating government tax authorities. Under the stipulated order filed in the U.S. District Court for the District of Arizona, Nuvei will pay $4.85 million for consumer redress, is banned from serving tech support telemarketers, and must implement robust merchant screening and chargeback monitoring practices. Note: this is a payments-fraud facilitation action under the FTC Act and Telemarketing Sales Rule, not a data privacy violation.
The FTC announced a seven-day extension of the public comment period on its proposed enforcement policy statement regarding personalized pricing, pushing the deadline from Sept. 18, 2026 to Sept. 25, 2026. Personalized pricing refers to using personal data to set prices based on what the company believes an individual consumer is willing to spend. This is a procedural announcement about draft agency guidance, not an enforcement action against any company, and no entity was named, no violation found, and no penalty imposed.
Colorado Attorney General Phil Weiser joined the FTC and 22 state attorneys general in filing a lawsuit against Amazon for manipulating the auctions used to set advertising prices, replacing actual auction results with higher prices since 2019 and overcharging nearly 1.2 million U.S. advertising customers. The FTC estimates total improper surcharges from 2018 to 2026 exceed $20 billion, with costs ultimately passed to shoppers through higher prices. The states seek a permanent injunction and monetary relief; no penalty has been imposed yet as this is a newly filed complaint.
$930K
The FTC finalized orders requiring CMG Media Corporation (doing business as Cox Media Group), MindSift LLC, and 1010 Digital Works LLC to pay a total of $930,000 for falsely claiming they offered an AI-powered service that could target ads based on conversations captured from consumers' smart devices, and that consumers had opted into such targeting. The orders also prohibit the companies from making misrepresentations about their advertising services, voice data collection, and consumer consent.