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E-Mail Marketer Paying Up in Unauthorized Spam Case

A company accused of using unauthorized personal data "mined" by other firms from about 6 million e-mail addresses nationwide has agreed to reform its practices under a $1.1 million settlement, New York officials said Sunday.

Datran Media Corp. of New York City, a leading e-mail marketer, used e-mail addresses and other personal data it obtained from several companies, New York Attorney General Eliot Spitzer's office said.

The settlement was scheduled to be announced Monday.

The Internet "customer acquisition" companies proclaimed on their Web sites that they wouldn't lend or sell the information provided. Consumers were often enticed to reveal their names, addresses and financial data in exchange for free iPods and DVD movies.

Spitzer accused Datran of knowing of the companies' pledges, but spamming those consumers with unsolicited e-mails anyway, advertising discount drugs, diet pills and other products.

Spitzer's staff said they believe it is the largest deliberate breach of Internet privacy discovered by U.S. authorities.

"We have always been and remain committed to industry best practices," Datran spokesman Mark Naples said. "Therefore, we are pleased to resolve this matter with the attorney general and are gratified that his office worked collegially with us."

Naples said Datran never received financial data and never sent e-mails regarding discount price drugs. He said that although 6 million e-mails are involved, that doesn't represent 6 million people.

Spitzer's probe began after an Internet security assurance company raised a concern, said Assistant Attorney General Karen Geduldig.

"Personal information equals marketing dollars," Spitzer said. "You learn more about consumers who you want to target in a hundred different ways and there's nothing wrong with that if you get the information properly."

Many of the operators request personal data that can be used in marketing and for companies to better tailor their products to consumers' needs and wants. Often, the operators of the sites promise not to sell the name or e-mail address that accompanies the data.