US: Snapchat deceived customers

This Oct. 24, 2013, file photo shows Snapchat CEO Evan Spiegel in Los Angeles. Snapchat has agreed to settle with the Federal Trade Commission over charges that it deceived customers about the disappearing nature of messages they send through its service and collected users’ contacts without telling them or asking for permission. AP PHOTO/JAE C. HONG

NEW YORK—Snapchat has agreed to settle with the Federal Trade Commission over charges that it deceived customers about the disappearing nature of messages sent through its service and collected users’ contacts without telling them or asking permission.

Snapchat is a popular mobile messaging app that lets people send photos, videos and messages that disappear in a few seconds. But the FTC says Snapchat misled users about its data collection methods and failed to tell users that others could save their messages without their knowledge.

Snapchat has said that it notifies users when a recipient takes a screenshot of a “snap” they’ve sent. But the FTC said recipients with an Apple device that runs an operating system that predates iOS 7 could evade the app’s screenshot detection. Apple’s iOS7 launched last summer.

In addition, the FTC says Snapchat’s app stored video snaps that were not encrypted on the recipient’s device. The videos remained accessible to the recipient, the agency said. A user could access a video message, even after it supposedly disappeared, if the user simply connected the phone to a computer and accessed the video in the device’s file directory.

The FTC complaint also alleges that Snapchat failed to secure its “find friends” feature. A security breach in January allowed hackers to collect the usernames and phone numbers of some 4.6 million Snapchat users. The breach occurred after security experts warned the company at least twice about a vulnerability in its system. Snapchat later issued an update to its app that fixed the issue and allowed users to opt out of the “find friends” feature.

The settlement doesn’t have a financial component, but if Snapchat is found to violate the agreement, the company could end up paying a civil penalty of up to $16,000 for each violation. The Los Angeles startup reportedly turned down a $3 billion buyout offer from Facebook last fall.

The FTC said Snapchat agreed to settle without admitting or denying any wrongdoing.—Barbara Ortutay