Complaint to FTC: Interactive doll recording children's private conversations

P-DANGEROUS DOLL.transfer.jpg

Smart toys are this year's coolest gifts.

They have the technology of a computer and the ability to interact with children like a real person.

But, some consumer groups say they are too invasive and break the law.

Now, they're asking stores to pull smart toys from their shelves including one in particular accused of spying on your kids.

My Friend Cayla is like Siri for your smartphone.

The doll connects to an app through Bluetooth technology to access the internet.

The problem is Cayla doesn't only listen to your child, she records their every word. Where those recordings end up is where this story begins.

CBS12 Investigates bought the doll, and asked seven-year-old Sage and her mom to try it.

The first grader quickly made friends with the smart-doll.

Cayla can answer questions, read stories, sing songs, and play games- everything a best friend can do.

But, there's something about Sage's new "gal pal" she doesn't know.

"These dolls are marketed to be a child's best friend, yet they're eavesdropping and spying on every secret they tell them ," said Claire Gartland, Director of Consumer Privacy at Electronic Privacy Information Center (EPIC).

EPIC, along with three other consumer groups, filed a complaint with the Federal Trade Commission (FTC) claiming the toy manufacturer Genesis Toys and its partner, Nuance Communications collect and use children's voices without proper parental consent.

All of that violates federal law.

Under the Children's Online Privacy Protection Act, companies collecting personal information from children must obtain direct and verifiable consent from the parents and provide clear notice of what is collected and how it is used.

"Parents should be very concerned that they have no idea what's being done with their children's private conversations and who is gaining access to it," Gartland said.

The Terms of Service states the speech data is collected and can be used by Genesis Toys and its third party for "other services and products."

We asked Sage's mom what she thought of the Terms of Service.

"It was not very clear about the third party," Zaicha Spodak said.

In the complaint, EPIC claims the speech recognition software provider (the third party) Nuance Communications is collecting the data and using it as part of its voice analysis technology. The company sells voice analysis technology to the military, law enforcement and intelligence agencies.

Gartland said you would never know that from the terms of service or the privacy policy.

"I don't think parents are sufficiently aware that these toys are subjecting their kids to ongoing surveillance,"

As a parent, that's a major red flag for Spodak.

"It is a concern to think about it. Because then, what if it is used for something," Spodak said.

In a statement to CBS, Nuance Communications wrote:

"Nuance does not share voice data collected from or on behalf of any of our customers... with any of our other customers."

Genesis Toys failed to respond to CBS12 Investigates' numerous emails and phone calls.

The FTC confirmed there is an open investigation. They sent us this statement:

"Privacy and data security have long been priorities for the FTC. Children's personal information is considered particularly sensitive and the FTC vigorously enforces the children's online privacy protection act (COPPA). the commission has brought numerous cases against companies that violated COPPA... Companies that market smart toys and other connected devices directed to children need take their privacy and data security obligations seriously and if they are collecting personal information from kids, they need to comply with COPPA."

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