These talking toys can tell a defense contractor everything your kid says
My Friend Cayla (Screen cap).

If you're thinking of buying a talking toy for your child this Christmas, you're really going to want to make sure to read the terms of service.

As Consumerist reports, several consumer groups have filed a complaint with the Federal Trade Commission against the makers of two talking children's toys: The My Friend Cayla doll and the i-Que Intelligent Robot.

The problem with these toys, the complaint alleges, is that their terms of service allow them to record everything they hear and then send that information back to Nuance Communications, a voice recognition software company that supplies the underlying technology behind the toys, but that also does work as a defense contractor.

In particular, the groups are crying foul over the fact both toys are covered by Nuance's general privacy policy, which states that they "may use the information that we collect for our internal purposes to develop, tune, enhance, and improve our products and services, and for advertising and marketing."

Where things get strange, however, is when the privacy policy later states that "if you are under 18 or otherwise would be required to have parent or guardian consent to share information with Nuance, you should not send any information about yourself to us."

This is odd since the toys covered by this policy are being targeted toward young children who will have no understanding about what they should or should not tell their toys while using them.

Consumerist notes that the complaint alleges Nuance's privacy policy violates Children's Online Privacy Protection Act of 1998, which states that "companies gathering children’s data have to provide notice to, and obtain consent from, parents about their privacy practices; that they have to permit parents access to review their kids’ data or have it deleted; and that they need to give parents the option of letting their kids’ data be used internally but not shared with third parties."

A fully detailed analysis of what the toys do and where they send data can be found at this link.