FreeiPods.com, the wildly popular marketing scheme that offers free iPods for trying out various subscription offers, sold the data it gathered on 7.2 million Americans to an email advertising firm, according to a story at Wired News by my colleague Ryan Singel.
(New York Attorney General Eliot Spitzer) announced Monday that e-mail marketing giant Datran Media had agreed to a $1.1 million fine for knowingly buying marketing lists from companies with privacy policies that promised not to sell or transfer the lists to a third party.
… Datran’s biggest purchase, according to the text of the settlement (.pdf), was a list of 7.2 million Americans’ names, e-mail addresses, home phone numbers and street addresses from Gratis Internet, a company best known for promising free iPods, televisions and DVDs to users willing to sign up for promotions offered by partners such as Citibank, Blockbuster and BMG’s music club.
The sites inspired dozens of “Is there really such a thing as a free iPod?” stories in the press (including one by Wired News), and internet forums were packed with pleas for information on how to acquire a free version of Apple Computer’s signature fetish item. The freebie required a registrant to sign up five others into the program, and eventually the legalized pyramid scheme reached its inevitable saturation point.
While many did indeed get a free iPod, all ended up with inboxes full of marketing pitches, which began showing up within hours of registering.
Gratis lied to me for the story I wrote originally about the company (also linked above), which did wonders for their early credibility, and then lied again for a follow-up story I wrote about it’s privacy practices that was prompted by the avalanche of spam its customers mysteriously received.
In addition, Gratis Internet was a member of Truste, which provides a “privacy seal” to companies it says have a trusted privacy policy.
When asked by Wired News in 2004 how third-party spammers got hold of Gratis members’ e-mail addresses, Truste said it could not find a problem with Gratis’ practices.
“The results of our investigation indicate that Gratis Internet did not violate their privacy policy,” Truste investigator Alexander Yap wrote in an October 2004 e-mail. “Truste did, however, work with them to strengthen and clarify their privacy statement.”
Several months later, Truste revoked Gratis’ seal of approval, then quickly reinstated it, then pulled it again, but declined to state publicly its reasons.
In the wake of this week’s settlement, Truste’s spokeswoman did not return repeated phone calls, and executive director Fran Maier did not respond to e-mailed questions about why Truste never discovered the alleged sale or informed the public that Gratis was not adhering to its privacy policy.
