Parental Consent for Sales and Data Collection

Posted by arlene

The issues involve in actually selling goods or services to children draw from those of advertising, as well as data collection, and some others concerns unique to the sales process. First, it is crucial that you let children know when they are in fact buying something. It’s too easy even for adults to misinterpret an online transaction as something less permanent. Next, because cash is not practical in the online world, most purchases will require credit cards or checks, both of which probably belong to and are funded by parents rather than children.

The parental notice issue is actually more a parental consent issue, whether you expect to collect information from children or to go ahead and sell them something. In all cases, to the extent that the law or applicable policy requires that consent be granted in advance, it must be the parents or guardians who provide that consent. As the exposure of children online grows, the number of situations in which you will have to get parents‘ consent prior to communicating with their children is likely to increase.

As you can imagine, the parental consent requirement has generated a fair amount of controversy among businesses and industry groups seeking to exploit the online marketplace, because it essentially eliminates most or all of the benefit of doing business on the Internet in the first place. What good is a two-way, interactive medium when the company must wait for some sort of verifiable parental approval before business? Consider as well the requirement of verifiability. The move toward parental consent is one of the few broad areas of Internet business in which someone’s actual identity must be verified. It is not likely that good-faith efforts to obtain parents‘ approval will suffice. In most cases the laws will require actual approval, although the mechanism may vary from law to law and industry to industry.

Unfortunately, just getting consent in advance is not the end of the effort. If you intend to sell to children, you may have to add one more burden to your management and accounting: the ability of a parent to undo a sale after it’s complete. This order rejection process, which has little or no precedent outside the Internet, is a direct response to the convenience and speed by which a child can anonymously place an order on a parent’s credit card.

This is more than a generous return policy. The way this concept has been described by CARU and legislators, it would permit parents to cancel a sale between order and shipment. If this right is mandated for your company and your industry, you may have to provide for a delay period with your warehouse or fulfillment house, send a copy of the order to the responsible parent, and still comply with FTC and other rules about shipping within a certain time after placement of the order. It won’t be easy, and it might even deter you from offering sales to any consumers, since your customers may turn out to be minors. Ultimately, it’s critical that you stay current on the requirements and obligations of online businesses that are targeting, or are at least open to, underage users.

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Parental Consent for Sales and Data Collection

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