Electronic toy maker reaches settlement with government over child privacy violations

Posted at 3:56 PM, Jan 11, 2018
and last updated 2018-01-11 16:56:54-05

Popular high-tech toys could be putting your family's safety at risk.

Last fall, The I-Team looked at how hackers used the kid-friendly gadgets to steal personal information from millions of families

The massive breach led to a government investigation, and the company that manufactures these internet-connected toys is now being forced to pay up. 

VTech's system was hacked two years ago, exposing the personal information of more than 6 million kids and their parents around the world.  The largest number of accounts accessed were in the U.S.  This week VTech agreed to settle charges brought by the Federal Trade Commission. 

The FTC says the company failed to take steps to secure the data it collected.   Acting Chairman, Maureen K. Ohlhausen, released this statement, "As connected toys become increasingly popular, it's more important than ever that companies let parents know how their kids' data is collected and used and that they take reasonable steps to secure that data."
According to the FTC, VTech stated in its privacy policy that personal information submitted by users would be encrypted.  The company allegedly failed to do so. 

This is the first children's privacy case involving internet-connected toys.  VTech has agreed to pay a $650,000 penalty to the U.S. government. It was also ordered to strengthen its data security and submit to outside security audits.