Background:

E-Kin has expanded its businesses and is growing exponentially. Their process for delivering custom-designed team and individual sportswear over the Internet has allowed them to establish a niche in the market with a unique product marveled by the competition. E-Kin wants to capitalize on this present position, so Ken E. Sellit, the Sales and Marketing Director, has decided to look for a way to obtain a new foundation of customers quickly so they can use this unique process and capitalize on consumer interests. Ken E. Sellit discovers a relatively new company, Kobeer, Inc. They are an internet startup company with a very similar market base. Ken E. Sellit convinces the Marketing department to purchase the customer database from Kobeer. This purchase requires the expense of 75% of E-kin’s annual marketing budget. However, the team feels it is a good investment that allows E-kin to penetrate a new customer base quickly. They purchase the list.

Issue:

Within one week of the first mailing, E-kin begins to receive complaints from people wanting to be taken off of the list and wanting to know how they got on the list in the first place. This issue is sidetracked by the excellent return they are seeing. The list alone has brought a 10% increase in new customers in the first week. However, the complaints still keep coming. Now this has the attention of Ken E. Sellit. He decides to look into the problem and contact Kobeer. To his surprise Kobeer is now defunct. They have declared bankruptcy and the company assets have been sold off. With no recourse on how the list was obtained by Kobeer, Ken and several of his top researchers begin their own investigation. The team sampled 2% of the database during the span of two weeks. They discovered that the consumers on the list never gave permission to have their personal information used for marketing or sales purposes. Although he can not accurately confirm this, but Ken believes that Kobeer gathered the customer information through an illegal tracking mechanism. He suspects that Kobeer compiled the list by using customer financial transaction history and they illegally obtained credit reports in order to determine the financial health of each customer before marketing their specialize products. This was all done without customer consent.

 Questions:
1. Should E-kin continue to use the list of names knowing that permission was never granted to use the information? Note: The list has proven to be of great business value, both in potential returns and in the money spent to obtain the list.

2. Is E-Kin ethically responsible for the use of the database, knowing that Kobeer outright deceived them?

3. Is this an issue of security or privacy? Who is the responsible party? Defend your answer.