A company that once boasted of creating an online directory of 90 million mobile telephone numbers, and drew fire from cell phone users and privacy advocates for it, said Friday it has stopped the service “in response to consumer feedback.”
Intelius Inc. made the announcement two days after a story about its controversial cell phone directory appeared on msnbc.com, and three days after a leading wireless phone company threatened to sue the Bellevue, Wash.-based firm.
“As a company, we have strived to be at the forefront of innovation,” said Liz Murray, the company’s communications manager, in a press release.
“We realize that in this instance we may have been ahead of our time. Wireless carriers attempted to develop a similar product a few years ago and found the market wasn’t ready. It’s clear that the market is still not ready.
“We always listen carefully to our customers, which is why we recently discontinued our cell phone directory.”
Verizon Wireless wasn’t a customer, but earlier this week called on Intelius to “halt the mining and sale of these numbers.”
“Stop it,” said Steve Zipperstein, vice president and general counsel of Verizon Wireless, in a statement. “This is a violation of Americans’ privacy. People expect their cell phone numbers to remain private.”
He said the company was considering litigation against Intelius in order to protect customers' numbers and privacy.
Ben Popken, editor of The Consumerist Web site, said “people were pretty freaked out” when they heard about the directory.
“They weren’t surprised that a company would do this, but they were shocked to hear it was actually happening,” he said.
Murray, in response to questions from msnbc.com yesterday, said Intelius’ use of the cell phone directory was based on the trend of consumers “transitioning away from land lines en masse.”
“We believed consumers would need many of the same tools widely available to landline users, such as a cell-based, white pages service (our directory) to keep them connected and enable their friends, colleagues and classmates to be able to keep in touch with them in an increasingly transient society,” she said.
She declined to further explain her statement that “the market is not ready” for such a directory, citing the quiet period the company is in leading up to an initial public offering.
Joseph Ridout, consumer services manager of the advocacy group Consumer Action, said it was a “relief” to hear that Intelius “has put the brakes on one of their anti-privacy initiatives.”
However, he added, “There are still other ways in which this company is unresponsive to consumer needs. For example, in order to opt out of its data collection scheme, there's still a ludicrous array of hoops one must jump through in order to do so.
“Although it is an Internet-based business that would allow for opt-outs very easily through electronic means where possible, Intelius requires one to make copies of one's driver's license, and mail or fax it to the company in order to opt out.”
Murray said Intelius has not heard any customer concern about its opt-out procedure.
“As good custodians of information, we have an obligation to ensure people are opting out their own information, thus the request for a copy of a form of ID,” she said.
Intelius describes itself as a pioneer in the “information commerce industry,” and provides an array of fee-based services, including background checks and identity theft monitoring.
Last summer, in a press release, the company unveiled plans to “enhance” its phone directory to include cell phone numbers, making it “one of the first companies” to include cell phone numbers.”
Intelius claimed it had about half the mobile phones in the country in its database, and charged $14.95 for each number that was searched.
The cell phone database has been live for a few months, but its privacy implications became high profile recently when the company filed for a $144 million initial public offering.
In its filing, the company noted that it was able to get around laws that bar telephone companies from compiling cell phone directories without users’ consent because the laws did not mention third parties, such as Intelius.
The company also said yesterday it continues to offer its reverse search, Cell Phone Caller ID service.
“That doesn’t seem to present as glaring a problem as compiling lists of more than 90 million Americans’ cell phone numbers without subscriber consent or knowledge,” said Ridout.
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