It's no sale for most of RadioShack's customer data. The bankrupt retailer will not sell the information and will destroy it instead. No credit or debit card numbers, social security numbers, birth dates or phone numbers will be transferred in accordance with a deal struck with a group of 38 state attorneys general.
As part of its bankruptcy, RadioShack had proposed selling off the information to raise money and repay creditors, but only a limited amount of data will be transferred after a flurry of controversy, CNNMoney reported Friday.
Last month, it was reported that General Wireless, a subsidiary of hedge fund Standard General, acquired the rights to the data in an auction of the defunct chain's intellectual property. The company previously acquired many of RadioShack's stores and plans to keep 1,750 of them open in conjunction with wireless provider Sprint. While the sale of intellectual property such as the brand name was approved, the stores and an online operation will retain the RadioShack name.
But suppliers like AT&T, Verizon and Apple as well as the Federal Trade Commission, consumer advocates and the state attorneys general objected, citing RadioShack's promise to customers that their data would be protected. The Delaware bankruptcy judge reserved the right to approve the customer data sale after the auction.
"This settlement is a victory for consumer privacy nationwide," said Ken Paxton, Texas attorney general. "It reflects a growing understanding of the importance of safeguarding customer information." The agreement for $26.2 million was approved by the bankruptcy court this week. The auction for assets other than intellectual property concluded in March with Standard General bidding $160 million.
Under a mediation agreement, RadioShack can sell customers' first and last names, mailing addresses and email addresses that were active in the two years prior to the petition date to General Wireless, TheStreet reported. Some AT&T and Verizon customer and commercial information will be excluded under the new stipulation.
General Wireless will also be able to purchase seven fields of customer transaction data, including store number, ticket date and time, stock keeping unit number, stock keeping unit description, stock keeping unit selling price, tender type and tender amount.
RadioShack will not sell email addresses that were active longer than two years before the petition date, customers' phone numbers, 14 customer transaction data fields that were previously marketed for sale or other customer data not listed in the mediation agreement.
The bankrupt retailer will not sell any credit or debit card numbers. Social Security numbers and other unique customer government identification numbers, which were previously collected under wireless service contracts, were not maintained by the debtor and no longer exist.
Emails will be sent to provide an opt-out opportunity. Email addresses of those who opt out will not be transferred or sold. Postal addresses will receive a mailing offering a 30-day window to opt out. Undeliverable mail addresses will be destroyed. The buyer will be bound by RadioShack's privacy policy and may not sell or transfer customers' personally identifiable information to third parties.
Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware in Wilmington set a June 25 hearing to consider the debtor's request to schedule a combined disclosure statement and confirmation hearing.
For more:
-See this CNNMoney article
-See this article from TheStreet
Related stories:
RadioShack aims to sell customer data, breach privacy policy
Standard General acquires rights to RadioShack brand at auction
RadioShack files for bankruptcy
RadioShack selling brand and locations separately
Standard General acquires RadioShack, appoints new CEO
