"If a company markets privacy and security as key selling points in pitching its service to consumers, it is critical that it keep those promises," Federal Trade Commission Chairwoman Edith Ramirez said in a statement.
According to the FTC, photos sent on Snapchat could be saved by recipients using several methods.
The FTC also said Snapchat collected certain personal information about its users without their consent and failed to take proper security measures, resulting in a breach in which hackers compiled a database of 4.6 million Snapchat user names and phone numbers.
Snapchat acknowledged that it had made mistakes, which it attributed to being a young company focused on developing its product.
"While we were focused on building, some things didn't get the attention they could have. One of those was being more precise with how we communicated with the Snapchat community," the company said in a blog post. "We are devoted to promoting user privacy and giving Snapchatters control over how and with whom they communicate. That?s something we?ve always taken seriously, and always will. "
The settlement with the FTC is subject to a 30-day public comment period, after which the commission will decided whether to make the consent decree final.