Protect Personal Customer Data in RadioShack Bankruptcy Case, FTC Urges Court

The FTC wants the court-appointed consumer privacy ombudsman in RadioShack’s bankruptcy case to recommend against the sale of personal customer data as a stand-alone asset, Consumer Protection Director Jessica Rich told the ombudsman, an agency news release said. RadioShack obtained personal data, including consumers’ names, addresses, email addresses and purchase histories from tens of millions of consumers, Rich said. RadioShack had extensive privacy promises it made to consumers online and in stores, including the promise to not sell consumers’ information or the company’s mailing lists, Rich said. Consumer information should be sold only to another entity that's substantially in the same line of business as RadioShack and that buyer should be bound by the RadioShack privacy policies that were in place when the consumers’ data was collected, Rich said. The buyer should also give consumers notice their data was bought and obtain affirmative consent if the data is to be used in a manner that differs from promises RadioShack made, she said. Rich pointed to FTC intervention in the bankruptcy case of the online retailer Toysmart, which sought to sell customers’ information despite promises made in its privacy policies, as an example of how conditions successfully can be put on the sale of data both to allow the company to divest assets and to protect consumers’ information, the release said. RadioShack’s privacy policy had said (see 1504020032) that “we will not sell or rent your personally identifiable information to anyone at any time.”