Through its routine monitoring, the Children's Advertising Review Unit ("CARU") became aware of Kudos & Co. ("Kudos") and its mobile application (the "App").

The App is a social community for kids where they can explore and share their interests with friends. The App allows children to share pictures and drawings, make comments, and share reactions. The App also allows for children to connect with other children through randomized suggestions made by the App. The App notifies parents of their children's posts and comments after they are made. According to Kudos, it employs content moderators that are on duty twenty-four hours a day, seven days a week, to monitor content on the App and remove any "inappropriate" content.

When registering for the App, a child is asked for a profile picture (by taking a selfie though the App's functionality), a username, password, first and last name, and date of birth. If the date of birth indicates that the child is under the age of thirteen, the App asks for parental contact information to obtain parental approval and limits the functionality of the App until parental approval is obtained. However, during the registration process, a child may alter his or her date of birth and thus bypass parental approval.

CARU determined that Kudo's practices did not comply with COPPA for the following reasons: the App did not use a reliable method of parental consent; it did not state in its direct notice that it collected parents' online contact information, that parental consent is required for the collection of personal information, and that the App will not collect, use or disclose any personal information from a child if a parent does not provide consent; and the notice did not stipulate that if a parent did not respond within a reasonable amount of time the App would delete the parent's contact information from its records.

Kudos has agreed to participate in a Safe Harbor program to bring the App into compliance with COPPA .