Consumer advice: Children aren’t exempt from online targeting

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TikTok, a popular video-sharing app, recently agreed to pay $5.7 million to settle allegations from the Federal Trade Commission (FTC) that it illegally collected personal information from children without parental consent. The FTC credited the BBB’s Children’s Advertising Review Unit (CARU) for assisting with bringing this matter to its attention.

The complaint, filed by the Department of Justice, alleged that TikTok, formerly called Musical.ly, knew many children were using the app but failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13, FTC Chairman Joe Simons said in a statement. The company knew because it received thousands of complaints from parents stating that their children were under 13 and had created Musical.ly accounts without a parent’s knowledge.

What is the Musical.ly app? It allows users to create short videos lip-syncing to music and share those videos with other users. To register for the app, it requires that the user provide their first and last name, user name, email address, phone number, a short bio and profile picture. There are about 65 million accounts registered in the United States.

The app allows users to interact with other users by commenting on their videos and sending direct messages. User accounts are public by default, which means that a child’s profile — including all personal information — could be seen by other users. What is disturbing is that according to the complaint, adults were trying to contact children via the Musical.ly app. In addition, until October 2016, the app included a feature that allowed users to view other users within a 50-mile radius of their location.

What Musical.ly allowed was a direct violation of the Children’s Online Privacy Protection Act, or COPPA, which requires websites and online services to direct children under 13 to get parental consent before collecting personal information. The FTC hopes that this record penalty will send a message to other online services and websites that the law will be enforced.

Ultimately, parents need to take control to protect their children.

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REVERSE MORTGAGE: Right for you? A reverse mortgage allows someone who is “house rich and cash poor” to get payments from their lender in exchange for the bank getting equity in the house. One has the option of taking a lump sum payment or receiving a monthly check from the bank.

But are they a good thing? While reverse mortgages have gained popularity in recent years, some seniors who are cash-strapped are wondering if they should go this route or if there are other alternatives.

The parents of a friend of mine took out a reverse mortgage (original loan wasn’t paid off) without fully understanding the implications. Within two years both parents were gone. With the compounded interest on the loans along with fees and a fluctuation in the market valuation where the home was located, this left the heirs with nothing to inherit. My friend is sure that had her parents been aware of alternatives, they might have chosen a different path.

Here are three options to consider.

1. Sell your home and downsize. This will allow you to access the equity you’ve built up in your home.

2. Refinance your house. It is plausible you could refinance your home and end up with a lower monthly payment (assuming you still have a payment). You’d have to check rates to find out if this makes sense.

3. Construct a reverse mortgage arrangement with family member(s). This option would essentially have the family member make mortgage payments to you in return for receiving equity in the home. For families able to achieve this, it can be an attractive alternative to giving that equity back to the bank.

You should check out any tax and estate planning implications, but it might be worth exploring alternatives to reverse mortgages. In general, reverse mortgages are known for having high fees associated with them. Even Consumer Reports has stated that reverse mortgages should be a last resort for seniors who want to stay in their homes and have no other alternatives. One exception might be for a single person with no heirs who wants to stay in their home. A reverse mortgage would allow them to enjoy their equity while they are able to do so.

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STAR CARD CLARIFICATION: Some readers called to clarify that for women who have been married, and possibly divorced and remarried, you will need to bring documentation proving your name change(s), particularly if the name on your birth certificate is different from your current name. Please refer to the Star Card tool at: https://itd.idaho.gov/starcard

Answer the questions and it will provide you with a documentation list of what you should bring. Remember, the card is not mandatory, but if you don’t have one by Oct 1, 2020, you will need to travel with your passport on commercial domestic flights as well as international flights.

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Also remember: I’m on your side.

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If you have encountered a consumer issue that you have questions about or think our readers should know about, please send me an email at terridickersonadvocate@gmail.com or call me at 208-274-4458. As The CDA Press Consumer Gal, I’m here to help. Please include your name and a phone number or email. I’m a fulltime copywriter working with businesses on marketing, a columnist and a consumer advocate living in Coeur d’Alene.

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