The most controversial part of the RadioShack bankruptcy auction has been the proposed sale of the company’s extensive collection of e-mail addresses, phone numbers, and mailing addresses. Everyone from Apple to most states’ attorneys general objects to this sale, which goes against the company’s privacy policy. That’s why the bankruptcy court appointed a privacy ombudsman to evaluate the situation and lay out some rules for how that information will be passed to the new owners of the RadioShack brand…or not.

Here’s the problem: some companies, notably the wireless carrier AT&T and device maker Apple, have objected to the sale of their customers’ data, and want it removed from the sale. If someone only happened to buy an AT&T iPhone at a RadioShack store, for example, their information wouldn’t be handed over to the new owners. However, representatives of RadioShack and of liquidator Hilco Streambank say that this isn’t possible: when customer information was added to the database, the retailer didn’t keep track of whether the customer came from a new mobile phone contract or buying batteries.

If you bought something at RadioShack or on their website and gave them your e-mail address (or used an account that already had your e-mail address associated with it) in the last two years, the Shack would be able to sell your e-mail address. There’s a five-year time limit on mailing addresses and phone numbers. However, the company says that it only marketed to subset of their mailing list, which consisted of customers who had been “active,” or had shopped at RadioShack, in the last year.

Not all information would be allowed to go along with each entry on the mailing list. Assuming that you didn’t opt out, here’s what information about you, a RadioShack customer, would go to the company’s new owners along with your name, address, mailing address, and/or phone number:

• Which store you shopped at
• The date and time
• The SKU number, description, and selling price (what you bought and how much you paid for it)
• How you paid
• The total on your receipt

The FTC submitted a letter meant to be part of the privacy ombudsman’s report where the agency recommends affirmative consent to being put on the new owners’ mailing lists: that means that customers would receive a notice that their name is on a list that had been sold, and they wouldn’t receive any more mail unless they opted in to receiving it.

The privacy ombudsman, on the other hand, recommends an opt-out policy, where customers who are on the list and who have shopped at RadioShack within the time limit will receive a message giving them the opportunity to leave the list. Notices about this will also be displayed at the cash registers at SprintShack stores.

REPORT OF THE CONSUMER PRIVACY OMBUDSMAN [PDF]

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