A recent bankruptcy of a now defunct website has me asking the question: What is more important? Creditors' rights or customers' personal information?
CNET reported yesterday about a website that catered to gay youth now in a
federal bankruptcy proceeding that could result in as
many as 1 million profiles being sold to creditors, putting its former
subscribers' privacy at risk.
XY, which billed itself as a young gay men's magazine and was found
at XY.com, shut down in 2007. Its founder filed for bankruptcy
protection earlier this year, which could put names, addresses, e-mail
addresses, unpublished personal stories, and other information about gay
minors into creditors' hands.
As part of the bankruptcy proceedings, creditors are entitled to the assets held by the bankrupt entity. The XY website's privacy policy indicated that "we never give your information to anybody." Now that the site is in bankruptcy, should that privacy policy trump the rights of the creditors?
It's an interesting question, and it will be fascinating to see how the Bankruptcy Court in this case will handle it. But it raises an important consideration for anyone who provides sensitive information to a website operator, even when the site's privacy policy offers its users the comfort that their information will be kept strictly confidential. In a world where privacy is become increasingly more difficult to ensure, here is an additional consideration when sharing personal information.