Summary of the FTC/DOJ Action Against Sendit (Iconic Hearts Holdings, Inc. & Hunter Rice)
The Department of Justice, acting on a referral from the Federal Trade Commission (FTC), has filed a complaint against Sendit’s operator, Iconic Hearts Holdings, Inc., and its CEO, Hunter Rice, alleging multiple violations related to the app’s practices. here’s a breakdown of the key issues:
1. COPPA Violation (Children’s Online Privacy Protection Rule):
* Knowing Collection of Children’s Data: Sendit was aware that a significant portion of its users were under 13 (over 116,000 reported being under 13 in 2022, plus parental complaints).
* Failure to Obtain Parental Consent: Despite this knowledge,Sendit failed to notify parents or obtain verifiable consent before collecting personal details from children,including phone numbers,birthdates,photos,and social media usernames.
2. Deceptive Practices & Unfair Billing:
* Fake Messages: Sendit used fake, often provocative, messages to entice users (including children and teens) to purchase a premium “Diamond Membership” to reveal the sender.
* Misleading Information: They falsely claimed messages were from friends/contacts and misrepresented what users would receive when purchasing a membership (either false info or generic details).
* Hidden Recurring Charges: Sendit failed to clearly disclose that the Diamond Membership involved a weekly subscription of up to $9.99, leading users to believe it was a one-time fee.
3. Violations of Other Laws:
* FTC Act: General prohibition of unfair or deceptive acts or practices in commerce.
* Restore Online Shoppers’ Confidence Act (ROSCA): Prohibits deceptive internet sales practices, particularly those wiht negative option features (like automatic recurring billing).
In essence, the FTC and DOJ allege that Sendit knowingly exploited children and teens through privacy violations and deceptive marketing tactics to generate revenue.
Current Status: The complaint has been filed in the U.S. District Court for the Central District of california. the case will be decided by the court.
