gwilks98
03-16-2006, 08:28 AM
Apparently, the privacy policy doesn't mean much to these companies.
http://www.wired.com/news/technology/0,70420-0.html?tw=rss.index
The big business of renting, selling and buying personal information about netizens was put on notice this week by New York Attorney General Eliot Spitzer in a high-profile case that exposed shady privacy practices and the dubious value of the once-promising Truste "privacy seal."
Spitzer announced Monday that e-mail marketing giant Datran Media had agreed to a $1.1 million fine for knowingly buying marketing lists from companies with privacy policies that promised not to sell or transfer the lists to a third party.
The case, which Spitzer described as the biggest violation of a privacy policy yet, promises to change the way the industry does business, said Chris Hoofnagle, an attorney with the Electronic Privacy Information Center who regularly publicized sales of lists that were supposedly protected by privacy policies.
"Every attorney that represents a list broker is going to call their client this week and say, 'This case in New York has made law, and that law says that if you are renting a list you have to make sure the seller's website's privacy policies are legitimate,'" said Hoofnagle.
Datran's biggest purchase, according to the text of the settlement (.pdf), was a list of 7.2 million Americans' names, e-mail addresses, home phone numbers and street addresses from Gratis Internet, a company best known for promising free iPods, televisions and DVDs to users willing to sign up for promotions offered by partners such as Citibank, Blockbuster and BMG's music club.
The sites inspired dozens of "Is there really such a thing as a free iPod?" stories in the press (including one by Wired News), and internet forums were packed with pleas for information on how to acquire a free version of Apple Computer's signature fetish item. The freebie required a registrant to sign up five others into the program, and eventually the legalized pyramid scheme reached its inevitable saturation point.
While many did indeed get a free iPod, all ended up with inboxes full of marketing pitches, which began showing up within hours of registering.
Gratis assured registrants they could opt out of such mailings, and claimed in its privacy policy, as of September 2004, that the company would send out marketing messages on behalf of other companies but would never sell or transfer its lists to any third party.
Those promises were not true, according to the settlement between Spitzer and Datran.
Rumblings of rogue e-mail marketing surfaced in 2004 soon after Gratis' sites were judged legitimate by press outlets and bloggers. The reports prompted Wired News to re-examine the company, and executives assured Wired News that they never sold their customers' e-mail addresses.
Seemingly bolstering its claim was the fact that Gratis' network of sites prominently displayed the logo of Truste, a nonprofit group that claims to certify and monitor website privacy and e-mail policies.
When asked by Wired News in 2004 how third-party spammers got hold of Gratis members' e-mail addresses, Truste said it could not find a problem with Gratis' practices.
"The results of our investigation indicate that Gratis Internet did not violate their privacy policy," Truste investigator Alexander Yap wrote in an October 2004 e-mail. "Truste did, however, work with them to strengthen and clarify their privacy statement."
Several months later, Truste revoked Gratis' seal of approval, then quickly reinstated it, then pulled it again, but declined to state publicly its reasons.
In the wake of this week's settlement, Truste's spokeswoman did not return repeated phone calls, and executive director Fran Maier did not respond to e-mailed questions about why Truste never discovered the alleged sale or informed the public that Gratis was not adhering to its privacy policy.
Truste has long been criticized as ineffective and too eager to make apologies for companies that violate the spirit of their privacy promises.
For its part, Datran sounded a note of contrition and passed along a warning to other marketing companies buying lists that were supposed to remain private.
"We take this matter very seriously," wrote Datran spokesman Mark Naples. "Therefore, we believe it was important to confront it head-on and resolve it quickly. Importantly, while Datran discontinued the practice in the first half of 2005 -- and began to do so before any inquiry from the attorney general -- many marketing and list-owner companies continue to engage in this practice."
Datran's contrition is enough to retain membership in the Direct Marketing Association, whose logo is prominently displayed on the company's website, according to Patricia Kachura, a DMA vice president.
"We would take the position that if the attorney general has looked into this, it sounds as if these practices have been corrected to their satisfaction, so we might look at this practice over the long term or at other companies, but I think this particular situation seems to have been resolved."
But Gratis co-founder Peter Martin disputes the allegation that his company ever sold or rented out customer information, saying that it hired Datran to work on creative design and back-office support for its e-mail campaign.
"Appointing a specialized vendor to manage such 'in-house' marketing operations is a commonplace, industry-wide practice," Martin said in an e-mail statement. "That's what happened here (between Gratis and Datran) and it is a standard and totally lawful practice."
http://www.wired.com/news/technology/0,70420-0.html?tw=rss.index
The big business of renting, selling and buying personal information about netizens was put on notice this week by New York Attorney General Eliot Spitzer in a high-profile case that exposed shady privacy practices and the dubious value of the once-promising Truste "privacy seal."
Spitzer announced Monday that e-mail marketing giant Datran Media had agreed to a $1.1 million fine for knowingly buying marketing lists from companies with privacy policies that promised not to sell or transfer the lists to a third party.
The case, which Spitzer described as the biggest violation of a privacy policy yet, promises to change the way the industry does business, said Chris Hoofnagle, an attorney with the Electronic Privacy Information Center who regularly publicized sales of lists that were supposedly protected by privacy policies.
"Every attorney that represents a list broker is going to call their client this week and say, 'This case in New York has made law, and that law says that if you are renting a list you have to make sure the seller's website's privacy policies are legitimate,'" said Hoofnagle.
Datran's biggest purchase, according to the text of the settlement (.pdf), was a list of 7.2 million Americans' names, e-mail addresses, home phone numbers and street addresses from Gratis Internet, a company best known for promising free iPods, televisions and DVDs to users willing to sign up for promotions offered by partners such as Citibank, Blockbuster and BMG's music club.
The sites inspired dozens of "Is there really such a thing as a free iPod?" stories in the press (including one by Wired News), and internet forums were packed with pleas for information on how to acquire a free version of Apple Computer's signature fetish item. The freebie required a registrant to sign up five others into the program, and eventually the legalized pyramid scheme reached its inevitable saturation point.
While many did indeed get a free iPod, all ended up with inboxes full of marketing pitches, which began showing up within hours of registering.
Gratis assured registrants they could opt out of such mailings, and claimed in its privacy policy, as of September 2004, that the company would send out marketing messages on behalf of other companies but would never sell or transfer its lists to any third party.
Those promises were not true, according to the settlement between Spitzer and Datran.
Rumblings of rogue e-mail marketing surfaced in 2004 soon after Gratis' sites were judged legitimate by press outlets and bloggers. The reports prompted Wired News to re-examine the company, and executives assured Wired News that they never sold their customers' e-mail addresses.
Seemingly bolstering its claim was the fact that Gratis' network of sites prominently displayed the logo of Truste, a nonprofit group that claims to certify and monitor website privacy and e-mail policies.
When asked by Wired News in 2004 how third-party spammers got hold of Gratis members' e-mail addresses, Truste said it could not find a problem with Gratis' practices.
"The results of our investigation indicate that Gratis Internet did not violate their privacy policy," Truste investigator Alexander Yap wrote in an October 2004 e-mail. "Truste did, however, work with them to strengthen and clarify their privacy statement."
Several months later, Truste revoked Gratis' seal of approval, then quickly reinstated it, then pulled it again, but declined to state publicly its reasons.
In the wake of this week's settlement, Truste's spokeswoman did not return repeated phone calls, and executive director Fran Maier did not respond to e-mailed questions about why Truste never discovered the alleged sale or informed the public that Gratis was not adhering to its privacy policy.
Truste has long been criticized as ineffective and too eager to make apologies for companies that violate the spirit of their privacy promises.
For its part, Datran sounded a note of contrition and passed along a warning to other marketing companies buying lists that were supposed to remain private.
"We take this matter very seriously," wrote Datran spokesman Mark Naples. "Therefore, we believe it was important to confront it head-on and resolve it quickly. Importantly, while Datran discontinued the practice in the first half of 2005 -- and began to do so before any inquiry from the attorney general -- many marketing and list-owner companies continue to engage in this practice."
Datran's contrition is enough to retain membership in the Direct Marketing Association, whose logo is prominently displayed on the company's website, according to Patricia Kachura, a DMA vice president.
"We would take the position that if the attorney general has looked into this, it sounds as if these practices have been corrected to their satisfaction, so we might look at this practice over the long term or at other companies, but I think this particular situation seems to have been resolved."
But Gratis co-founder Peter Martin disputes the allegation that his company ever sold or rented out customer information, saying that it hired Datran to work on creative design and back-office support for its e-mail campaign.
"Appointing a specialized vendor to manage such 'in-house' marketing operations is a commonplace, industry-wide practice," Martin said in an e-mail statement. "That's what happened here (between Gratis and Datran) and it is a standard and totally lawful practice."