FOR IMMEDIATE RELEASE:

January 3, 2002

FOR FURTHER INFORMATION CONTACT:

Beth Rosenberg, Ron George

973-504-6327

NEWARK - ToysRUs.com, one of the nation's largest online retailers of children's toys and other products, which generated $180 million in sales during fiscal year 2000, has agreed to clarify its Internet privacy policy and plans to work with the New Jersey Division of Consumer Affairs to increase the public's awareness of privacy issues, Attorney General John J. Farmer, Jr. and New Jersey Division of Consumer Affairs Director Mark S. Herr announced today.

Also as part of the agreement, ToysRUs.com will pay $50,000 to the State, which will be used for the development and implementation of programs designed to inform the public about issues relating to privacy on the Internet. The company also does not admit any liability or wrongdoing.

The agreement ends Consumer Affairs' inquiry into ToysRUs.com's Internet privacy policy, in which the State alerted the company of some potentially confusing wording used on its various Web sites. ToysRUs.com cooperated with Consumer Affairs and reviewed its policy, agreeing to make necessary changes to ensure the privacy of consumers' personal information.

As part of the agreement, ToysRUs.com has agreed to:

• Assure consumers that it will not make any misrepresentations in its privacy policy pertaining to its collection, use and transmission of personally identifiable information obtained from consumers who purchase products online from ToysRUs.com.
  
  
• Ensure that it will provide a complete and accurate summary of its policy regarding the disclosure of any personal information collected from consumers who access its Web sites.
  
  
• Maintain a clear and conspicuous link to its privacy policy on its Web sites and fully disclose the use of "cookies" or other devices commonly used to track consumers in the Internet.

"E-commerce is big business these days as more and more people take advantage of the convenience of shopping from home," Attorney General Farmer said. "We are pleased ToysRUs.com has fully cooperated with the State in addressing Internet privacy issues. New Jersey's online consumers have a right to know if their personal information is being distributed to a third party."

"Customers spent more than $26 billion online in 2000, according to the United States Department of Commerce," said Herr. "Companies must post easy-to-understand privacy policies on their web sites and stand by these policies. If they don't, they risk violating the Consumer Fraud Act and the State will not hesitate to pursue these companies and take the appropriate legal action."

Herr added, "The Division of Consumer Affairs has been diligent in its efforts to protect consumers' privacy online. It's been a major initiative of the division and we have reached several agreements with companies that have resulted in safer online shopping for New Jersey's residents."

Last year, for example, the State, along with 38 other states and the District of Columbia, entered into an agreement with U.S. Bank National Association, in which the group agreed to stop selling customer data to third-party marketers. In this case, information such as consumers' names, addresses, phone numbers and social security numbers were sold to telemarketers who attempted to sell residents various products and services.

As part of that agreement, U.S. Bank agreed to allow consumers' to opt-out of information sharing.

Also, the State last year vigorously opposed, along with 46 other states, the sale of ToysMart.com's customer list when the company filed for bankruptcy. The sale of the customer list, which contained personally identifiable information, would have violated the company's published privacy policy that stated consumers' information would not be shared with a third party.

The customer list was eventually destroyed by Disney, the online retailer's majority owner.

Additionally, as part of its commitment to protecting consumers' privacy on the Internet, the Division of Consumer Affairs has concluded a study of Internet privacy issues and proposed several regulatory and statutory changes to increase citizen's protection.

Senior Deputy Attorney General Jeffrey C. Burstein handled the ToysRUs.com matter for the State.