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The Federal Trade Commission has authorized staff of the FTC’s Bureau of Consumer Protection to send a letter to the court overseeing the bankruptcy proceedings of education technology company ConnectEdu raising concerns about the proposed sale of the company’s assets, which include student information. The company collected data from high school and college students, along with their parents and counselors, to provide guidance on career choices.

In its privacy policy, ConnectEdu promised consumers that prior to any sale of the company, consumers would be notified and have the ability to delete their personally identifiable data. The letter states that the terms of the sale of the company and its subsidiary Academic Management Systems, Inc., in bankruptcy do not provide consumers the notice and choice set forth in the privacy policy and could potentially run afoul of both the FTC Act and the Bankruptcy Code.                                                                                                                        

Commission staff has weighed in before to help protect consumers’ privacy interests in bankruptcy proceedings such as in Borders bookstores and XY Magazine.

The Commission vote approving the issuance of the letter was 5-0.  The letter was filed in In re ConnectEdu, Inc., No. 14-11238, in U.S. Bankruptcy Court in the Southern District of New York.

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