State Moves To Block The Sale Of Personal Information By Internet Toy Store

In an effort to protect the privacy rights of consumers, State Attorney General Spitzer today petitioned United States Bankruptcy Court in Massachusetts to prevent Toysmart.com, an Internet toy store, from selling its customer list and related information to a third party.

Spitzer alleges that such a sale would violate the Internet company's own posted privacy policy, constituting a deceptive business practice under State law. In addition, Toysmart.com, whose products are aimed at children on-line, does not appear to be in compliance with the 1998 federal Children's Online Privacy Protection Act.

"The Internet offers extraordinary convenience to customers, whether it's shopping, investing or research we're interested in. But it also places us in an electronic fishbowl in which our tastes, activities and personal information can be recorded," Spitzer said. "Toysmart.com's proposal to sell its customer list is particularly troubling because its products are targeted to kids, and it has repeatedly promised not to sell a consumer's private information."

Toysmart.com is a Massachusetts-based on-line store for children's toys, which markets popular product lines like Harry Potter, Blue's Clues, Toy Story and Sesame Street, among others. Through its website, www.toysmart.com, personally identifiable information such as name, phone number, age, and personal and e-mail addresses is collected from customers, which may include children. A privacy notice was posted on the website, in September of 1999, promising consumers that "when you register with toysmart.com, you can rest assured that your information will never be shared with a third party."

This past June, Toysmart.com filed for bankruptcy and sought relief under Chapter 11. Included among the assets being offered for sale were the rights, title and interest in Toysmart.com's customer list and database of related customer information. The company, partly owned by Disney, reportedly maintains a list of nearly 250,000 consumers.

Spitzer noted that we have a particular obligation to protect children, who are the most vulnerable Internet consumers.

The Attorney General's Objection to the proposed sale was filed in the United States Bankruptcy Court in Boston, Massachusetts. The case was handled by Assistant Attorney General Stephen Kline of the Internet Bureau, which is under the supervision of Bureau Chief Caitlin Halligan.

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