Sears settles with FTC in privacy flap

WASHINGTON, June 4 (Reuters) - Sears Holdings Corp (SHLD.O: Quote, Profile, Research) has agreed to settle allegations it collected personal data from customers without adequate disclosures, the Federal Trade Commission said on Thursday.

The FTC had accused Sears Holdings, created in 2005 with the merger of Sears and Kmart, of paying online customers $10 to allow the company to track their online browsing.

But the FTC said Sears also collected information on non-Sears sites, such as online bank statements, drug prescription records and emails.

"The software would also track some computer activities that were not related to the Internet," the FTC said in a statement.

Sears did disclose all it would monitor in a lengthy user license agreement, but the FTC argued it was not enough.

"The complaint charges that Sears' failure to adequately disclose the scope of the tracking software's data collection was deceptive and violates the FTC Act," the FTC said in a statement.

Sears did not immediately reply to two telephone calls and one email seeking a comment.

Under the settlement, Sears is required to destroy the data collected and make future disclosures more prominent. (Reporting by Diane Bartz; Editing by Andre Grenon)