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Plans to sell Dick Smith customer info sparks concerns

By Heather Wright, Fri 4 Mar 2016
FYI, this story is more than a year old

Receivers for the failed Dick Smith businesses have been spoken to by privacy commissions on both sides of the Tasman, after concerns were raised over their plans to sell Dick Smith’s customer databases.

Ferrier Hodgson, which was appointed receiver in January, is currently seeking ‘urgent expressions of interest’ for the sale of Dick Smith Holding’s intellectual property, including customer databases, as they wind down the business and seek to maximise the returns to creditors.

However, their action has raised concerns in both New Zealand and Australia.

The New Zealand Privacy Commissioner, John Edwards, says the commission has contacted the legal advisers of the receivers of Dick Smith Electronics following a ‘stream’ of enquiries from the public about customer data.

“We have received assurances that the receivers are aware of and will comply with their obligations under the New Zealand and Australian Privacy Acts,” Edwards says in a statement.

Meanwhile, in Australia, acting information commissioner Timothy Pilgrim warns that businesses selling or purchaing customer databases need to be mindful of their obligations under the Privacy Act 1988.

“I would strongly encourage any business considering this step to ensure that they seek legal advice before engaging in these types of transactions,” Pilgrim says.

A spokesperson for the receivers and managers for the Dick Smith Group says the receivers are investigating the sale of various assets.

"While a potential sale may include customer information (amongst other things), the form and substance of any such sale that may take place is yet to be determined," the spokesperson says.

"The receivers are aware of their obligations under the privacy legislation in Australia and New Zealand regarding the use and disclosure of personal information.

"Any sale which may take place in the future would not be in breach of those obligations."

The spokesperson says the receivers will communicate with all customers on the database ahead of any sale, and customers will be provided with an election in relation to their personal information being included in any sale.

Ferrier Hodgson’s advertisement on their own site calls for expressions of interest for the intellectual property assets of Dick Smith’s Australian and New Zealand businesses.

Those assets include the Dick Smith and Move online businesses, brand and trademarks, cutomer data bases and websites and domain names.

Those interested only have until 5pm AEST today to lodge their interest.

The attempt to sell the IP assets follows Ferrier Hodgson’s announcement last Thursday that all Dick Smith and Moves stores were to close after attempts to find a buyer for the business failed.

The closure of the 301 stores in Australia and 62 in New Zealand is expected to be completed within a matter of weeks, with nearly 3000 staff across the two countries affected by the closures.

Ferrier Hodgson’s James Stewart noted in January that there had been more than 40 expressions of interest prior to the business being officially put up for sale, and said the New Zealand business was profitable and expected to be attractive to potential buyers.

That initial confidence, however, proved misplaced, with Stewart last week saying while a ‘significant’ number of expressions of interest were received from local and overseas parties, no acceptable offers had been received for the group as a whole or for the Australian or New Zealand businesses individually.

“The offers received were either significantly below liquidation values or highly conditional, or both,” Stewart says.

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