Datran Media Settles with NY AG for $1.1 M
In reaction to accusations of an Internet privacy breach discovered by authorities, email marketing company Datran Media Corp. has agreed to a $1.1 million settlement with NY attorney general Eliot Spitzer and a major change in the way it collects Internet user data. Datran reportedly mined over 6 million email addresses through customer acquisition firms, and collected names, addresses and financial data through the use of enticements like iPod and DVD giveaways.
Datran obtained over seven million files from Gratis Internet, a company which promised to never “never lend, sell or give out for any reason” the personal information provided by its users. This transaction constituted what the New York Attorney General calls on their site the “largest deliberate breach of a privacy policy discovered by U.S. law enforcement to date.” Spitzer and the NY AG are continuing to investigate Gratis and other companies that compile and sell information on the Internet.
The finding by New York officials raises concerns over the vague distinction between acceptable data collection methods for online marketing and unethical spam tactics. “Personal information equals marketing dollars,” Spitzer said. “You learn more about consumers who you want to target in a hundred different ways, and there’s nothing wrong with that if you get the information properly.”
Datran maintains in the settlement that its business practices are ethically sound. Mark Naples, the spokesman for Datran,tells ADOTASthat in the past year the company has discontinued its relationships with businesses which change their privacy policies retroactively, and has adopted new measures such as employing a Chief Privacy Officer to oversee its compliance efforts. It will continue to provide email marketing services for its clients, which include Business Week, Columbia House, Fox Home Entertainment, NASCAR, Orbitz, and Pitney Bowes.
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