The creditors of a XY, a gay magazine and its accompanying
website have been warned not to sell off any of their young
subscribers' personal information after going bankrupt.
XY magazine and XY.com catered to gay men aged as young as 13 with advice and features on politics, culture, education and families but their owners filed for bankruptcy earlier this year.
The firm has just one valuable asset left – its database of one million users, complete with names, street address, bank details and email addresses.
The majority of the young men on the database will be gay, with many likely to be keeping their sexual orientation from their families.
The company's creditors, Peter Larson, listed as majority owner of magazine publisher XY Residuary Corp, and Martin Shmagin, president of financial consulting firm Innovative Financial Solutions, have apparently asserted ownership of the customer information.
The Federal Trade Commission (FTC) has warned them that any transfer of the database will violate the privacy standards in place before the company collapsed.
According to the FTC's letter, the company had made a number of promises to readers that it would never sell their personal data, and even posted the magazine to subscribers in plain black packaging to avoid their parents seeing it.
The letter warned that using the data to restart the magazine and website could also violate federal law.
It said: "In this case, the XY privacy policy is simple, explicit, and clear. Subscribers and members were told that their personal information would not be sold, shared, or given away to 'anybody'. This includes the names, addresses, profile information, and credit card information submitted by subscribers.
"Therefore, any sale or transfer of the data to a new company, new owner, or other third party would directly contravene the privacy representations and could constitute a deceptive practice by the original company or its principals. Such practice also could be unfair."
It concluded by asking for the data to be destroyed as soon as possible.















