A Consumer Reports subscriber claims that the consumer empowerment organization sold intimate details about his life to data miners, in violation of a Michigan privacy law.
Don Ruppel sued the publisher, Consumers Union, in U.S. District Court in White Plains on April 1. The St. Charles, Mich. resident said the magazine sold his personal information to list brokers who in turn sold the information to telemarketers, and as a result he has been barraged with junk mail and unwanted telephone solicitations.
Ruppel is asking the court to certify the case as a class action on behalf of thousands of Michigan subscribers. He is demanding at least $5,000 per subscriber for damages that would total at least $5 million.
“Consumer Reports does not sell information about our Michigan subscribers and we believe that the lawsuit is without merit,” the Yonkers-based nonprofit organization responded in a written statement.
Furthermore, it said it provides clear notification of its data sharing practices and gives subscribers and users the ability to easily opt out.
Ruppel said Consumers Union “profits handsomely” from selling customers’ personal information, but he did not say how much he thinks the organization is paid for the information.
He cited promotional material from NextMark, a marketing firm in Hanover, N.H., that charges a base rate of $110 per thousand Consumer Reports names. If the entire list of 2.8 million subscribers were sold, the broker could charge more than $308,000.
List brokers typically segment names into smaller groups.
Consumers Union sells myriad details about subscribers’ lifestyles and personal interests, according to the lawsuit, such as full names, home addresses, the publications they subscribe to, gender, age, ethnicity, income, religion, parental status and political affiliation.
A telemarketer could buy a list that identifies Consumer Reports subscribers who are Spanish speaking, female, over the age of 80, with no children at home and a net worth greater than $500,000.
That violates Michigan’s Preservation of Personal Privacy Act, according to the lawsuit, prohibiting disclosure of a customer’s identity.
Consumer Reports said it accepts no advertising to maintain its independence and it closely guards its own information to protect its reputation for producing unbiased journalism.
It does not allow its name, ratings, information or excerpts of its content to be used in paid advertising and press releases, according to its website.
“All decisions made by the organization are driven by the consumer interest,” it said.
Parts of Ruppel’s complaint read like a Consumer Reports article. He quotes warnings from U.S. senators who said in 1988 that consumer information reveals “our loves, likes, and dislikes” and that the collection of consumer information creates a trail that becomes a “form of surveillance.”
Michigan law reflects the “gut feeling that people ought to be able to read books and watch films without the whole world knowing,” the lawsuit stated.
Subscriber information is often used by fraudulent telemarketers and other criminals who lure unsuspecting consumers into scams, Ruppel said. Older people are particularly vulnerable to telemarketing schemes.
Compare that with a 2009 report in Consumer Reports Money Adviser, in which readers were warned that “everything from your shopping habits to your health history” can be made available to creditors, employers and even criminals. “All they need to do is tap into the public and private databases that gather, buy, and sell your vital statistics.”
Money Adviser stated that the information that is being sold can paint a complete picture of an individual’s activities, raising privacy concerns. It called mailings lists “the Wild West of databases.”
“The real value for buyers comes from prescreening the names by certain characteristics – for example, people known to be affluent, homeowners, mail-order buyers, investors, people who have specific diseases or are disabled, new parents, older people, donors/contributors, and so on,” the magazine stated.
“We screen all such offers and strive to select trustworthy, reputable companies who offer high quality products or services of interest to you,” the policy stated.
The policy also explains how users can opt out of sharing their information.
Ruppel did not answer a voicemail request to discuss his case or respond to Consumer Report’s denial of wrongdoing. Philip Fraietta, a lawyer from Bursor & Fisher P.A., the Manhattan law practice representing Ruppel, said the firm does not comment on cases in litigation.
Besides the nuisance of junk mail and unwanted phone calls, Ruppel’s lawsuit states the loss of privacy has a monetary value.
Had he known that his personal information would be sold, “he would not have been willing to purchase his Consumer Reports subscription at the price charged, if at all.”