StoneLock raising funds as customer biometric security system implementation courts controversy

StoneLock has raised $2.8 million of a planned $5 million funding round, according to documentation filed with the Securities and Exchange Commission, just as the deployment of its biometric facial recognition technology by one of the company’s customers is facing pushback.

StoneLock was chosen by a New York landlord to provide facial recognition technology for a proposed security system which has become a source of controversy with building tenants, Government Technology reports.

The application by Nelson Management Group to deploy an access control system based on facial recognition technology is the first of its kind for a building with regulated rent, according to HCR. The group applied in July to install the StoneLock system, which would encrypt facial biometric templates and store them on a StoneLock Gateway server under Nelson Management Group’s control.

Atlantic Plaza Towers Tenant Association is seeking an extension to the review period from state agency Homes and Community Renewal (HCR), which oversees rent-controlled housing in New York.

Resident are given 20 days to respond to notices from HCR, but notice of the applications reached some residents late, and others not at all, they say. A local counselor then wrote to HCR to request tenants’ concerns be thoroughly considered.

“Nelson Management Group prioritizes identifying and implementing cutting edge technology at all our properties to create a safer environment for tenants. The sole goal of implementing this technology is to advance that priority,” Government Technology reports Nelson Management Group spokesman Chris Santarelli said in a statement. “We appreciate engagement from tenants on this matter and look forward to feedback from (HCR).”

A building resident said that tenants are “predominantly” African-Americans and women, which could potentially set up allegations of discrimination. Many facial recognition algorithms have been shown to perform less accurately on people with darker skin, and women in particular. If a resident is locked out of the building by a false non-match, the reputation of both the landlord and the technology itself could be significantly damaged.

There were already tensions between residents and Nelson Management Group, after tenants were required to have photographs taken to receive keys to new mailboxes, and have received notices making clear video footage of their entrances to the building have been reviewed, according to Government Technology. The tensions have escalated as tenants say security called police to prevent them from distributing flyers to other tenants in the building lobby. The tenant association President Patricia Winston says the group unanimously voted against the proposal.

The landlord sent a representative to meet with tenants in February, and assured them that their data would never be shared with a third party without a court order, but some tenants felt their concerns were not adequately addressed.

Rental rates on the rent-controlled units can only be increased in certain circumstances, including when they are vacated, which could provide an incentive to increase turnover. Nelson Management Group points out that turnover at the building has actually decreased to roughly half the rate it was from 2008 to 2015.

“These rent-stabilized tenants should not be forced to choose between giving their landlord control of their biometric data and keeping their homes, especially in a gentrifying neighborhood where affordable housing is hard to come by,” Mona Patel, an attorney with Legal Services NYC’s Tenant Rights Coalition, said in a statement. “Tenants are rightfully concerned …”

The failures of customers implementing biometric systems, particularly for employee time and attendance tracking, to meet the data protection requirements of state law has led to numerous lawsuits in Illinois, and a wave of negative publicity associating biometric technology with lax privacy and procedural considerations.

HCR has yet to issue a decision, and when it does, either the tenants or the landlord could appeal it.

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