NY AG Raps Yahoo! for Marketing Practices

Yahoo reached a settlement to end an investigation of its marketing practices by the office of New York’s attorney general. Under terms of the settlement, Yahoo will halt plans for a program that would have opted-in some customers to receiving Yahoo telemarketing solicitations. Yahoo also agreed to pay $75,000 to cover the investigation’s costs.

The inquiry stemmed from Yahoo’s move in March 2002 to alter its marketing-preferences policy for members. The company sent out notification that it would begin marketing to registered users, whether they had opted out of such messages or not, unless they opted out again within 60 days. Yahoo agreed to suspend the planned marketing program while the investigation was proceeding, according to the attorney general’s office.

The agreement calls for the company not to telemarket services to customers who opted out of such solicitations when they registered prior to Yahoo’s policy change in March 2002. The portal also agreed to give 30 days notice before changing its marketing policies, giving users links to either opt-out or cancel their accounts.

“It is neither appropriate nor legally permissible for a company to compile a database of personal information through an online registration process and then attempt to use the information for telemarketing purposes to target consumers who have stated that they do not want to receive solicitations,” New York Attorney General Eliot Spitzer said in a statement.