Publishers Clearing House addresses privacy concerns

Publishers Clearing House Inc. patched its app and revised its disclosures after regulators found privacy issues, including failure to let consumers opt out of third-party tracking that could pinpoint a mobile device to within 15 meters, a new report says.

The Jericho-based company, known for "prize patrols" that deliver oversized checks to sweepstakes winners, faced consumer complaints that it allowed third-party advertisers to collect users' data without providing full disclosure.

In response, the Advertising Self-Regulatory Council issued a formal review dated Monday as part of the industry's self-policing program. The self-regulatory system is administered by the Council of Better Business Bureaus. 

The formal inquiry was initiated following complaints that the pch.com website let third parties collect data for use in online advertising "without providing enhanced notices as required" under principles of the Digital Advertising Alliance, an industry standards group.

The review of the company's online practices found that "at least 50 third-party companies" were harvesting data from the PCH website.

The Digital Advertising Alliance standards permit such data harvesting, but require companies to provide proper notice to consumers, including opt-out mechanisms.

The review also covered four PCH mobile apps offered on Android and iOS operating systems and found "evidence that these third parties were collecting cross-app data."

In the case of mobile apps, the examiners found issues with disclosure and the opt-out mechanisms, including instances where third parties could harvest users' locations.

After being contacted about the inquiry, PCH "immediately conducted a comprehensive review of its compliance" and worked to find "comprehensive solutions," the report said.

In a statement, a PCH spokesman said that the company "demonstrated its commitment to user privacy by revising its disclosures and investing in new technologies and employee training to ensure that its desktop opt-out mechanism remains current."

The company also engineered a patch to its mobile app "to prevent the third-party collection of precise location data," he said.

PCH was founded in 1953 in a Port Washington garage by Harold and LuEsther Mertz and their daughter, Joyce Mertz-Gilmore, according to the company website.

In addition to the sweepstakes that helps market magazines, the company creates digital games and runs contests on social media sites such as Facebook and Twitter.

The closely held company has annual sales of more than $900 million, according to the website.

In addition to its Jericho headquarters, PCH has offices in Melville, Manhattan, Boston and Portland, Maine.

By Ken Schachter

kenneth.schachter@newsday.comkschach

Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.