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Beleaguered ConnectEDU Faces Data Decision in Bankruptcy Efforts

• By Dian Schaffhauser
• 05/28/14

In an April blog entry on its site, education technology provider ConnectEDU defended the use of data "to progress students toward true success in their education and careers." Now that same company, which filed for Chapter 11 bankruptcy protection at the end of April, faces the wrath of the Federal Trade Commission, which has publicly expressed concern about how the company will handle the student data it has compiled over the last 12 years of operation.

ConnectEDU provides interactive online tools to help students and their families and school advisors with career planning activities. The students build listings of their academic and personal interests on the site and gain access to resume builders, test preparation resources and other services that help connect its members to additional education and career opportunities.

The company claims information about 20 million registered learners, 5,000 educational institutions and 130,000 employers across 40 countries. As the FTC letter explains, students have provided the company with information about name, date of birth, address, email address, phone number, grade level, and details about their "academic and personal interests, honors and awards and work experience." ConnectEDU has also collected personal information in the form of student records made available in its contracts with high schools and community colleges.

It's that data the FTC is concerned about. In a letter sent to the judge handling the case in Bankruptcy Court for the Southern District of New York, FTC Director of the Bureau of Consumer Protection Jessica Rich warns against allowing the company to sell its data assets. At issue is ConnectEDU's privacy policy, which promises to obtain consent from its customers before it makes "personally identifiable data" available to third parties:

"Except as set forth below, the personally identifiable data you submit to ConnectEDU is not made available or distributed to third parties, except with your express consent and at your direction. In particular, the Company will not give, sell or provide access to your personal information to any company, individual or organization for its use in marketing or commercial solicitation or for any other purpose, except as is necessary for the operation of this site."

In the event of a sale, the company states that it "will give users reasonable notice and an opportunity to remove personally identifiable data from the service."

ConnectEDU, which is operating with a minimal staff to keep two subsidiaries going, is hoping to sell or transfer its assets through the bankruptcy proceeding.

As Rich's letter concludes, the FTC's concerns about the use of the data being maintained by ConnectEDU would be "greatly diminished" if the company notified users about the sale and allowed them to remove their data or "destroyed" the personal information. A third option would be to appoint a "privacy ombudsman" to watch over the "privacy interests" of the company's customers.

That ConnectEDU blog references the latest Marvel movie, Captain America: The Winter Soldier, in which the world is imperiled by an evil computer system that intends to identify and kill anybody who poses a threat to its own big, big data operations. Concludes the anonymous author, "With our learners protected by the right policies put into place, we can overcome fear and utilize personal data for good, just as Captain America would want."