Consumers Union agrees to $16.4M subscriber privacy settlement
Consumers Union, the pre-eminent, nonprofit consumer protection organization that publishes Consumer Reports, has agreed to pay nearly $16.4 million to settle a class-action lawsuit for selling subscribers”™ personal information.
The settlement was agreed to in April and formally approved Dec. 4 by U.S. District Judge Kenneth M. Karas.
Both sides depicted the settlement as a compromise.
Consumers Union, based in Yonkers, “continues to deny any wrongdoing,” the settlement states. But it agreed to the deal, “taking into account the uncertainty and risks inherent in any litigation.”
Don Ruppel of St. Charles, Michigan, believed he would have prevailed at trial, according to the settlement, but he conceded that Consumers Union “has raised factual and legal defenses that present a risk” that he might lose.
Michigan subscribers to Consumer Reports will be paid about $180 each, according to court documents. Ruppel, as the lead plaintiff, will get $7,500. The law firm that represented him, Bursor & Fisher PA of Manhattan, will get one-third of the settlement, or $5,458,333.
Consumers Union tests and analyzes products and services and it advocates for stronger consumer regulatory protections. Consumer Reports magazine is known for its policy of accepting no advertising, to maintain its editorial independence.
Ruppel sued Consumers Union in 2016, accusing the publisher of unjust enrichment under Michigan”™s Preservation of Personal Privacy Act.
He said he had been barraged with junk mail and unwanted telephone solicitations. The publisher, he alleged, sold subscribers”™ personal information to list brokers, including details such as the full name, income, home address, gender, age, ethnicity, religion, parental status and political affiliation.
List brokers, according to the lawsuit, then sold the information to telemarketers who could target specific groups. A buyer, for instance, could get a list of Consumer Reports subscribers who are Spanish-speaking females over the age of 80 with no children at home and a net worth greater than $500,000.
Consumers Union responded in a written statement to the Business Journal in 2016 that it provides clear notification of its data-sharing practices and gives subscribers the ability to easily opt out.
“All decisions made by the organization,” Consumers Union said, “are driven by the consumer interest.”
Ruppel originally demanded $5 million, based on $5,000 each for an estimated 1,000 Michigan subscribers.
The $16,375,000 settlement, Bursor & Fisher partner Joseph I. Marchese declared in a September court filing, “secures extraordinary relief” for Michigan subscribers.
Marchese said the settlement is the largest ever reached in a Michigan personal privacy case, though the law firm has a pending class-action settlement with Hearst Communications Inc. in federal court in Manhattan for $50 million.