In a lawsuit that may be a harbinger of similar claims against companies that sell personal information to third parties (regardless of existing laws), Reader’s Digest has agreed to pay $8.2 million to settle a class action suit in Michigan.
Michigan law prohibits the disclosure to a third party personal information that connects an individual to the purchase of specific media—written media for the most part, but the law extends to video and audio recordings of material used to distribute it. There are some workarounds regarding advertising, but they are limited.
The complaint in Taylor et al v Trusted Media Brands was that Reader’s Digest sold subscriber information—personal and demographic—to a third party without the consent required by the state of Michigan. The demographic information sold pertained to religion, political affiliation, and age.
Placing the situation on the absurd side of things non-compliant when it comes to consumer privacy, the lacking permission could have almost certainly been covered in Reader’s Digest’s terms of agreement regarding subscriptions.
Taylor et al should be considered a warning shot to any enterprise that sells their customers’ information for the purposes of marketing and advertising.
As consumers and lawmakers begin to better understand the value propositions attached to personal information, the protections will be strengthened, and as that happens we can assume federal standards will be next. The worse the abuses out there, the stricter the regulations to come. This should be ample motivation for companies that traffic in personal information to self-police in the meantime.
Read about it here.
