RadioShack made it a common practice to collect various information including names, addresses and e-mail addresses from customers over the years. As is the case with virtually every other retailer, such data was collected with the promise that it would only be used for in-house purposes like promotions and more importantly, wouldn’t be sold to third parties.
If you recall, Standard General LP emerged as the winner of RadioShack’s assets during a recent bankruptcy auction. The company agreed to pay $26.2 million for RadioShack’s branding and IP, a purchase that included the aforementioned data of tens of millions of former customers.
The fate of RadioShack’s customer data has drawn the attention of Federal Trade Commission Protection Director Jessica Rich who recently submitted a letter to the court overseeing the company’s bankruptcy.
In it, Rich recommended that conditions be put in place to protect the privacy of customers on RadioShack’s list. She referred to the previous FTC intervention in the bankruptcy case of online retailer Toysmart which attempted to sell its customers’ personal information despite promises to the contrary when it was still in business.
Rich’s letter recommends that RadioShack customer data not be sold as a standalone asset but bundled with other assets. Further, she recommends that the information only be sold to acompany in the same line of business as RadioShack and that the buyer agree to be bound by the same privacy policies that were in place when RadioShack collected the data.
Rich also recommends that the buyer notify customers of the transfer of ownership and obtain consent before using it in a manner that is different from what RadioShack promised.
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