RadioShack puts customer personal data up for sale in bankruptcy auction
by Bryan on 05/29/15
For years, RadioShack made a habit of collecting customers’ contact
information at checkout. Now, the bankrupt retailer is putting that data
on the auction block.
A list of RadioShack assets for sale includes more than 65 million customer names and physical addresses, and 13 million email addresses. Bloomberg reports that the asset sale may include phone numbers and information on shopping habits as well.
The auction is already over, with Standard General—a hedge fund and
RadioShack’s largest shareholder—reportedly emerging as the victor. But a
bankruptcy court still has to approve the deal, and RadioShack faces a
couple legal challenges in turning over customer data.
As Bloomberg points out, Texas Attorney General Ken Paxton has argued
that selling the data would be illegal under state law. Texas doesn’t
allow companies to sell personal information in a way the violates their
own privacy policies, and signage in RadioShack stores claims that “We
pride ourselves on not selling our private mailing list.” Paxton
believes that a data sale would affect 117 million people.
Oddly enough,
the other privacy defender in this case is AT&T, which wants
RadioShack’s data destroyed for competitive reasons. AT&T doesn’t
think RadioShack is entitled to the personal information it collected
from wireless sales, and may be concerned that the data might fall into
another carriers’ hands. (One bidder wants to co-brand some RadioShack
stores as Sprint locations, Bloomberg reports.)
There is precedent for allowing customer data to be auctioned off in
bankruptcy proceedings. In 2011, the Federal Trade Commission allowed
Borders to auction personal data if the same privacy policy applied, the
buyer was in the same line of business, and the data was sold alongside
other assets. Standard General, which plans to keep some RadioShack
stores open, may try to argue that it’s putting the data to similar
uses, Bloomberg reports. Why this matters: As
if RadioShack wasn’t obnoxious enough when you had to turn over a phone
number just to buy a cable splitter. Now, the store’s trying to go back
on its promise to keep that data to itself. It’s one more reason to
treat these contact information requests with caution, since you can
never be sure where the data will end up. -PC WORLD
