A controversial mobile app, Neon, which pays users to record their phone calls for AI training, has announced it will relaunch despite a recent major security breach. Founder Alex Kiam emailed users Tuesday, assuring them that accrued earnings would be honored—with an additional bonus for patience—when the service resumes.
The App’s Controversial Model: Neon gained popularity by offering financial incentives for call recordings. Users could earn up to $30 daily for regular calls or 30 cents per minute when calling other Neon users. The app’s business model relies on selling anonymized call data to AI companies eager for real-world speech samples. The collected data is used to refine voice assistants, capturing nuances (such as timing, filler words, and emotions) that synthetic training data often misses.
Security Breach and Temporary Shutdown: The app was forced offline in late September after TechCrunch revealed a flaw allowing unauthorized access to other users’ call recordings, transcripts, and metadata. Kiam confirmed the vulnerability and temporarily disabled the servers, promising to implement additional security measures. Users were temporarily unable to withdraw funds, though Kiam assured them that earnings would be preserved.
Legal and Ethical Concerns: Neon operates in a gray area of privacy law. The app’s terms of service grant it broad rights to “sell, use, host, store, transfer,” and publicly display recordings. Experts warn that the legality of such recordings varies significantly by jurisdiction. Some states (including California, Florida, and Maryland) require consent from all parties on a call, meaning Neon users could face legal repercussions for non-compliant recordings.
Data Privacy and AI Training: Even if anonymized, experts note that AI could potentially re-identify individuals within call recordings. Data governance expert Valence Howden explains that AI models can infer personal details, even from stripped data. This raises concerns about the app’s compliance with privacy regulations, particularly in jurisdictions with stricter consent laws.
The Risk to Users: Legal counsel David Hoppe warns that Neon’s terms of service won’t shield users from liability. Recording a call in a jurisdiction requiring two-party consent without informing the other party could lead to criminal charges or civil lawsuits. The app’s incentive structure (paying users for recordings) doesn’t mitigate legal risk.
Neon remains available on iOS and Android, though its ratings have declined due to user reports of cash-out issues and scam accusations. The app’s impending relaunch underscores the tension between data monetization and privacy, leaving users to weigh financial rewards against potential legal and ethical consequences.
The future of Neon remains uncertain, but one thing is clear: the app’s model pushes the boundaries of privacy and consent, forcing users to navigate a complex legal landscape while potentially exposing themselves to risk.
