Student List Broker Faces Deception LawsuitNew York attorney general Eliot Spitzer announced a lawsuit yesterday against list brokerage Student Marketing Group Inc., which specializes in data for children and young adults, on charges of deceiving students into divulging their personal information.
Student Marketing Group, Lynbrook, NY, has established a not-for-profit organization, the Educational Research Center of America, to enlist teachers in its effort to collect student marketing data, the attorney general's office said in a statement. The research organization has mailed surveys funded by the company to teachers every year since 1999, according to the complaint.
Teachers presented the surveys to 14 million students annually, the attorney general's office said. In New York alone, "tens of thousands" of school faculty members at about 2,000 schools received surveys, according to the lawsuit.
Accompanying the surveys were cover letters explaining that data collected would be used "by universities and colleges nationally in their ongoing efforts to communicate and keep in touch with the interests and trends among today's high school students" and by financial aid and student scholarship agencies "to evaluate and make funding available for students' post-secondary education," according to Spitzer's office.
However, the data were sold and used to market items including magazines, music videos, credit cards, clothes, cosmetics and student loans, a use not mentioned in the cover letter, the attorney general's office charged.
"As a father of school-age children, I am outraged by this company's business tactics," Spitzer said in a statement. "The company's ultimate goal was not to help students or to research educational issues. Instead, the goal was to collect personal information about students and provide it to direct marketers."
In addition, the lawsuit charged that the Educational Research Center of America kept an address on Pennsylvania Avenue in Washington to give the impression that the organization was a government institution, the attorney general's office said. The real address of the Pittsburgh-based organization is the home of its only officer, Spitzer's office charged.
The attorney general's office has asked the New York state court to bar Student Marketing Group from using the data it has collected through the surveys. The office also is seeking unspecified fines.
A woman who answered the phone at Student Marketing Group's office said company representatives were not immediately available for comment.
The education bill signed by President Bush early this year requires all schools that receive federal funding to notify parents when data are collected from students for marketing purposes and give them the opportunity to opt out.
However, the law exempts collection of data for non-commercial purposes. Because the cover letters sent by Student Marketing Group failed to mention that the information would be used for marketing, school officials may have been led to believe that the law didn't apply, a spokeswoman for the state attorney general's office said.
The attorney general's office is probing the data collection practices of other marketing firms that specialize in marketing to children and young adults but can neither confirm nor deny that any active investigations are under way, the spokeswoman said.
In December 2001, another list broker specializing in student data, Mineola, NY-based American Student List, criticized the Wall Street Journal for an article concerning its practice of buying student data collected in a survey by the not-for-profit National Research Center for College and University Admissions. The article ignored the benefits students and parents enjoy from the marketing offers they receive and failed to report that only name, address and age data are shared with marketers, the brokerage complained.