RadioShack puts customer personal data up for sale in bankruptcy auction

Asset sale could include millions of e-mails, physical addresses, and customer names, if legal challenges don't stop it.

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.

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