April 9, 2018 / 4:33 PM / 7 months ago

UPDATE 1-Consumer Reports publisher in $16.4 mln reader data privacy settlement

(Adds statement from Consumers Union)

By Jonathan Stempel

NEW YORK, April 9 (Reuters) - The publisher of Consumer Reports magazine has reached a $16.375 million settlement of a lawsuit claiming it violated Michigan privacy law by selling readers’ subscription and personal data to third parties without their consent.

A preliminary settlement of the proposed class-action case against Consumers Union was filed on Monday with the U.S. District Court in Manhattan, and requires a judge’s approval.

Consumers Union was accused of selling customers’ magazine subscription histories and reading habits to data mining companies and others in exchange for demographic and lifestyle data, and then selling “enhanced” customer profiles containing this data to other companies for a profit.

Data that was allegedly shared by the nonprofit included age, race, religion, income levels, charitable donations, medical conditions, political affiliations and travel habits, court papers show.

Consumers Union denied wrongdoing, and said the settlement, which would be covered by insurers, would avoid the costs and uncertainty of further litigation.

“We have long advocated for the rights of consumers to have control over their private information,” a spokeswoman said. “While we believe that our practices were in compliance with Michigan law, we chose to settle this case, without admitting liability, so that we can spend our time, effort and resources on protecting consumers.”

Monday’s settlement covers about 560,000 people who lived in Michigan from April 2010 to October 2016 and subscribed to a Consumer Reports publication.

The lead plaintiff was Don Ruppel, a Consumer Reports subscriber who claimed he received “harassing” junk mail and phone solicitations because his personal information was sold.

Lawyers for the plaintiffs may seek up to $5.46 million for legal fees and costs, court papers show.

The case is Ruppel v Consumers Union of United States Inc, U.S. District Court, Southern District of New York, No. 16-02444. (Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)

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