VPN provider accused of violating privacy policies

US-based private non-profit advocacy group for consumer privacy rights Center for Democracy & Technology (CDT)has filed a 14-page complaint with the US Federal Trade Commission (FTC) on Monday alleging that the provider of the popular Hotspot Shield Free VPN has violated it's own privacy policy and broken promises it made to its users by sharing their private web traffic with online advertisers for the purpose of improving the ads shown to its users.

In a length filing, the CDT claimed that it contradicts headline privacy and security claims in its own privacy policy; facilitates targeted ads; redirects traffic to secret VPN servers and "employs insecure and unreasonable data security practices."

The tool, produced by Hotspot Shield, has managed to attract around 500 million customers from around the world with promises of "anonymous browsing" and claims that it keeps "no logs of your online activity or personal information."

The CDT urged the FTC to investigate alleged deceptive and unfair trade practices carried on by AnchorFree — the company behind the Hotspot Shield VPN.

Currently, Hotspot Shield is offered as a free and paid product. The free product injects ads in users' web traffic, and the elite version provides an ad-free VPN experience. The company has always been upfront with this policy, and in an interview with ZDNet last year, AnchorFree's CEO said that 97% of its estimated 500,000 userbase is using his company's free VPN service.

One reason that consumers sign up for VPN services like Hotspot is to shield their browsing habits from internet service providers and other online entities that broker user data, or to access services that ISPs -- or host nations -- otherwise block. But the VPN effectively has access to the same data that it's shielding from the outside web.
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