Slashdot Mirror
Banks Find Way To Sell Consumers' Shopping Data
nonprofiteer writes "Banks plan to compete with Groupon and LivingSocial by targeting coupons and deals at credit card holders based on their shopping habits. They found a way to do it without violating financial privacy laws: 'They're "selling" shopping habits the same way Facebook "sells" personal data about its users: in-network. It's a clever privacy work-around. Just as Facebook allows advertisers to specifically target certain kinds of users based on their profile information (without actually providing that profile information to the advertisers), banks plan to allow advertisers to send deals and coupons to their customers based on what they've bought before. That way, no user data actually leaves the network — instead, deals just enter the network. Each time a customer cashes in on one of those deals, the bank gets a commission.'"
If "I am defined by what I consume" (from 'you are what you eat') then my shopping history is user data. And as far as my bank is concerned, that's a pretty good definition of their customers.
John
So, I send a bank a deal aimed at consumers who (for example) bought alcohol and restrict the geography to an overwhelmingly Mormon neighborhood and get back a list of names. I cross reference those with church memberships. I now can target the backsliders.
I have somehow magically not violated anyones privacy.
I'm taking my daughter powerboating thanks to a good Groupon deal. We don't normally do that kind a thing, but a good deal caught my eye and it sounded a blast. There is no way could anyone have seen that coming from my purchase history. This isn't the first time Groupon has appealed to the random in me either, and from what I gather from talking to other people this isn't uncommon.
biopowered.co.uk - catalytically cracking triglycerides for home automotive use since 2008. Just say no to big oil!
Citibank deserves to go out of business in the most horrible way possible.
Sorry, but gray text on gray background is making my eyes bleed.
There are many credit unions ready to accept me with open arms, and there are way more benefits when doing business with them.
Isn't this like the game "go fish"?
Have any cat fanatics? 10!
Have any porn addicts? 10000!
And every response or query about more information, or even downloading of image-data for the ad, outs the users targeted by the bank on behalf of the banks spam-client.
If you can be accomplice to murder, you can sell private information by proxy too.
go round and round... will someone please flatten the bank's tires already?
Boredom is bliss.
I love the sentence banks plan to..... it always fills me with hope for how their service is going to benefit me even more...
I have this really funny quote that I like to put here. Unfortunately, there's this really annoying thing called a char
See Cardlytics at:
http://cardlytics.com/
I place a certain value on my privacy. I had one of those "loyalty cards" years ago at the nearby grocery. I'd use it to get the cheaper price on the stuff they sold me. In return I got a bunch of junk in the mail trying to sell me more stuff. When I stopped using the card I got less junk in the mail.
I had a credit card. In exchange for using the credit card the credit card company sent me stuff in the mail trying to sell me more stuff. They would also call me at home. How far and wide this information on my buying habits went hit me when I used my credit card at a gas station I don't normally visit and a couple weeks later I got a credit card advertisement in the mail from the gas station. I pay for my fuel and groceries with cash now excepting rare occasions when I forget to stop by the bank before my wallet gets too thin, then I pull out my debit card.
Not only does using cash prevent banks from selling my buying habits it also avoids the threat of my bank account information from being stolen with those hidden card readers that are popping up on gas pumps and the like. I don't even like to use ATMs any more. Not only is there a threat of my card getting copied by a hidden card reader the ATMs spit out only $20 bills. With a tank of gas costing over $60 and a grocery cart filled with food typically costing around $100 I prefer to see a real live teller so I can get $50 and $100 bills, that way my wallet doesn't get so fat and I can still buy what I need.
Now, I just wish those vending machines would take $2 and $5 bills. With a bottle of soda costing around $1.50 it makes sense to me to take the larger bills. This is also because I've had to not buy a drink because my wallet is full of $5, $20, and $100 bills.
All the crap in the mail, and the phone calls interrupting my supper, stopped for the most part once I got rid of my credit cards. Not using a debit or credit card for most purchases does mean a few more trips to the bank and having to pay for gas inside the station but that is a minor inconvenience. The bank is within walking distance of my house, and I'll often go into the gas station anyway when I travel to get a snack or use the restroom. It keeps the junk mail and cold calls down.
I am armed because I am free. I am free because I am armed.
It has become little more than a source of paper spam.
Marketer: What did blair1q buy last week?
Bank: I would be breaking the law to tell you that.
Marketer: Did blair1q buy a toilet brush last week?
Bank: I would be breaking the law to tell you that.
Marketer: If I were to send an email to blair1q asking him to buy my toilet brush, and cut you in if he does, would that be worth anything to you?
Bank: No.
Marketer: What if it was a turnip peeler?
Bank: Put the coin in the slot, please.
Rubbing your pencil over the pad to mark it with lead and expose the un-marked indentations that were left by writing on the previous sheet is about 150 years old as an intelligence-gathering trick.
Exactly. My example was spur of the moment, so not all that well formed. Given some thought, you can come up with more effective scenarios.
But regardless, you give information on at least some of the customers to the retailer (or whoever the retailer is fronting for).
did this to me at the ATM today. I COULD NOT complete my ATM transaction without agreeing or denying a 2% cash back on my card if i went to a certain local italian chain (i refuse to give them more advertising). I went in and asked for a feedback form. No point in yelling at a teller for something that she has no control over. I will also be sending a formal typed and mailed letter of complaint to Chase headquarters.
Good-bye
And offer spam filtering services for regular mail, this is getting ridiculous. I can't imagine banks getting away with this in Ireland for long. One thing to be said for the parish pump politics.
1) Customer does stuff
2) Bank notes this
3) Advertiser asks bank to send coupon to people who did that sort of stuff
4) Bank sends customer coupon
Up to this point, the banks' lawyers are right - there's no information going anywhere bad.
5) Customer uses coupon
Now, we are giving information to the advertiser about the customer. This is BAD, and possibly illegal.
Note on the one hand that it was the customer's action that led to the information leak.
Note on the other hand, however, that the customer does not know what information was to be leaked, and so cannot be said to have given consent. Consider if Macy's asks that a normal-seeming coupon be sent to people who shopped at kinkysextoys.com, using that coupon is in no way tied in the mind of the recipient to the information at stake.
So that's the problem. The solution? Include the relevant information with the coupon. That way, the customer knows what information they are giving to the advertiser, and can absolutely be said to be opting in at that point. This does run some risk of others reading the coupon, and so these coupons must therefore be treated with the same respect given to any other form of transaction history until the customer decides to disclose them publicly by using the coupon.
Somehow because the consumer chose to use the coupon, does that constitute agreement by the consumer to share this information with the retailer? Will a disclaimer to this fact be included with the coupon?
I would hope that to be legal, the coupon would have (in lettering the same size as the details of the coupon) a statement that "using this coupon will share information with the retailer that includes your shopping habits, account size, payment history, address, credit score, and any information we have about other accounts under your name or address." Short of that, this type of leak should be a felony landing the CEO in jail.
Learn to love Alaska
Mormons operate much more like a cult than most major religions. There are significant consequences to not behaving the way the church wants you to behave.
Most of that is based on extensive social pressure. The Mormon church tries very hard to narrow your social existence down to just other mormons. They have special fellowship groups for mormon singles to make sure you're meeting and marrying other mormons. They have their own TV channel with programming they expect you to watch - and if you don't watch it, everyone at church will admonish you when they talk about what was on and you don't know what they're talking about. There is tremendous pressure to conform, and there is lots of programming that starts early. You know how women dream of the "perfect wedding"? Well, in the mormon church, they program you from a very early age to really want to be married at the mormon temple in Utah. Don't behave the way the church wants you to? No perfect wedding for you!
So, if you're a single woman and tell your catholic priest you're using birth control, he'll probably tell you the pope doesn't like it and suggest something else. If you tell your mormon church official that you're using birth control, they will require you to go to counseling about the evils of premarital sex and if you don't go, they will toss you from the church, which may very well result in all your friends and family refusing to continue to associate with you. And don't think that's limited to severe behaviors - I knew an (unmarried) couple pushed into intensive religious counseling because the church officials found out they were both laying horizontally on the same bed at the same time! (By, I believe, basically suggesting to the female half that she better be honest or god was going to smite her.)
Now, I have not interacted much with mormons in the past 10 years, so maybe this has all changed since then, but I doubt it.
So yeah, as far as the Mormon church goes, it is a totally different animal than most of the rest of your garden variety religions.
paintball
Summary says:
Offermatic already does this. Yes, it could arguably be "easier" if the credit card companies do this, but then one would have to go to different sites (if they have cards through multiple banks).
With technology trying to progress to 'moneyless payments', this'll throw it back a few years.
I'm sure lots of people won't want to get bothered with advertisments for using their bank card to pay for something. Instead they'll just draw the money and pay with cash. I know I would do that. This'll move the whole aim at using mobile payments or whatever back quite a bit.
So far, what has enabled nice things like adblock to work is that advertisers don't trust the people who host their ads. But in the case of facebook and apparently the banks now, advertisers are more willing to trust leaving people fewer options if they want to stop being a marketing target.
How is this anyway different from what Google does?
I found a vendor online who seems to consistently manage to allow my credit card data - including my name, mailing address, and CVV number - to be compromised virtually every time I buy something from them. All kinds of worthless shit has been purchased in my name as a result, and my check card has been replaced no less than 3 times as a result.
To top it off some of the shit gets sent to me. Anyone want "Chinese" weight-loss green tea? Yeah, me neither. Although that wasn't as much of a pain in the ass as the time I had to call a Jewish dating site and tell them I did not want to run a personal ad on their site. They were at least willing to cancel the ad and refund the money, there was a different site who did neither, and none of the sites would give me the information that was on the ad that I was charged for.
On that note, I give Kudos to Blizzard software. One time my card was used to buy a bunch of WoW credits from their webserver. I contacted them, they immediately reversed all the charges and placed my card on the "do not accept charges from this card, ever" list; which is great as I have no interest in WoW.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
Let's say I want to know who in your town has purchased pornographic videos. I go to the bank with a "buy one get one free" deal for my pizza parlor and have them send it to everyone who's purchased one or more porn videos. As people redeem those coupons, I build up a pretty good idea of who's watching movies they'd rather I didn't know about.
I can repeat this sort of thing with different deals and different criteria, and get a pretty good idea of what sort of information the bank has. Since the bank is kindly hiding the link between my coupons and your habits, you don't have any idea that I'm doing this.
"They redundantly repeated themselves over and over again incessantly without end ad infinitum" -- ibid.
Credit Union.
Did you know that movie theaters give away half-off tickets to... anyone who goes before 5 PM?
It doesn't seem that you understand price discrimination very well. Often times the best way to maximize profits is to find a way to charge lots of people what they're each individually willing to pay instead of trying to maintain the same price for everyone. Even if none of your groupon customers become repeat customers, you still upped your revenue. And you may have upped your revenue by a lot more than the cost of the groupon - that's why, for example, theme parks often practically give tickets away. Even if you don't pay them a thing to get in the park they'll still make money when you buy concessions.
Groupons won't work for every business, but anyone who insists that groupons are bad for businesses has a very limited understanding of business.
paintball
I do not agree to be spammed by a bank. I'll go to another one if they start.
I do not fail; I succeed at finding out what does not work.
I think there is no data being sold. As the article itself points out, no data leaves the network, only ads go IN. I do see one bit of data has to leave the network: the user must have a cookie set or something that identifies that they are responding to the ad. The advertiser then connects the ad to your data -- but you are the one that gives your personal data. I just don't see a privacy breach here.
Currently hooked on AMP
I got a free pizza out of the deal. I'm cool with this.
In your example, what you are really pointing out is that whatever percentage of customers click on the links, or even view the email with downloaded pictures, are revealing themselves and losing their privacy. In order for the bank to receive a commission it needs to admit that particular customer was indeed part of the chosen demographics.
There should be ways for the bank to get the kickback without the customer being identified specifically. A coupon could have a non-unique barcode to keep track of how many customers the bank sent the merchant's way without the coupon being specific to the client. Same goes for links in email; isn't it more trouble to have every click-through associated uniquely with an email?
Can someone clarify how viewing the email with downloaded pictures necessarily identifies the customer? I suppose my arguments would be moot if that was the case.
At what point does a specific code link to a specific user, the only person who knows that is Citibank?
When they use the code to buy something, and thus are identified. A good ploy to require this is to force online purchases so nobody can pay in person with cash and get the deal with their unique code. Or, depending on the rules, have Citibank just distribute an image in their spam that leaks the information to 3rd parties directly when someone clicks on it. After all, if 3rd party leaks are allowed (necessary for the scheme this article is about), then this is exactly the same thing with just a little of the middle pulled out.
Learn to love Alaska
Bring it on!
Based on your previous purchases we recommend:
* FREE V!AGRA SAMPLES.
* R0LEX REPL!CA WATCHS.
* and a letter from some Cambodian king that desperately needs to give you $200,000
Every harsh word you utter has the right address. It only sounds harsh because the one on the envelope is the wrong one.
For a good, prescient treatment of our current state, you could do worse by checking out Frederick Pohl's "Merchant Wars". Out-of-print, tragically, but worth looking for in the used stores.
Barclaycard's customers weren't interested in being sold a load of crap with their credit...
http://www.thisismoney.co.uk/money/cardsloans/article-1591611/Barclaycard-ends-Nectar-points.html
"... and more and more now there are all kinds of electronic goodies available" -- Pink Floyd 1972
USAA's decision to not participate in this scam/scheme is nice to see, and reinforces my decision to get a card through them.
If you're eligible, go for joining.
Chip H.
It's quite simple, and clever, and it works like this:
You bought those shoes in Nordstrom using your Citi debit card. Citi now know that information. What's more, they mine their database for all sorts of data that they then use to build up a profile of your shopping behaviour.
However, they do not share that information. What they do is quite coyly tell all merchants, "I have some customer info here... are you interested?"
Then Macy's contact Citi and say, "I want to attract new customers. I'll gladly pay you if you give this 25% off offer to people who bought shoes somewhere else during the past 3 months. The coupon has a unique identifier to, hum, avoid duplicates and fraud."
Likewise, JC Penny's call Citi and ask, "How much for you to give around my 10% coupons to all females that bought three pairs of shoes during the past 6 months, and also like eating at fancy restaurants? Oh, that code on the coupon? That's just for us to track the offers and ensure consistency, no worries."
Citi then gladly accepts the money and the offers. It delves into its database and mines all customers and finds that you are a female that has bought three pairs of shoes in the last 6 months, and looky here, you've eaten at some upscale restaurants quite a bit, often paying more than $200.00 for a meal. All that is on record, since you use your handy and convenient Citi card. You're the perfect customer for those offers!
One day, you check your e-mail and find some nice offers. Very nice ones, indeed (20% off on shoes at Macy's? More for your collection, yay!). So you buy some shoes at Macy's, proudly extend your coupon to the cashier, along with your credit card, and relish on your good fortune.
The cashier scans the coupon, along with its special identifying code, and the computer recognizes it as the one issued for that special offer deal with Citi. Your credit card record is now easily correlated to the specifics of that offer.
Notice that at no time did Citi had to give away any of your details directly to its partners, yet they were able to get them (or at something very close to them) indirectly.
That night, you check your e-mail and find a coupon for JC Penny's: 10% off shoes. My, you can't believe your luck!
-dZ.
Carol vs. Ghost
I thought the headline said "Blacks Find Way To Sell Consumers' Shopping Data" and did a double-take :-/
Unity? Screw that: XFCE. Slashdot Beta? Screw that: SoylentNews. Australis? Screw that: Pale Moon. UX developers DIAF
Yet another reason I'm doing most all transactions I can with CASH.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
How did all you idiots get the fool idea that Macy's is going to have a [Non-Identified User]:[Specific Coupon Code] mapping? The bank goes, "We sent out offers. People clicked. We need 50 coupons." End of story. Macy's knows they sent out 50 coupons this time for these offers in this pool (maybe the bank doesn't tell them that, but they can still jockey the offers to differentiate the pools). They know the people showing up to claim are CitiBank customers. They know where they live because, well, you're either shopping locally or you're putting your address in online for delivery.
They have roughly the same amount of data mining space as sending out coupons to all addresses in a mass mailing, but with much fewer things to mail due to preoptimization.
Support my political activism on Patreon.
At least that makes sense. My friend bought a plasma TV, and started getting offers for more plasma TVs.
1. This is horrible, and I'm thinking that the term "going postal" will be replaced by "going bank" after people get pissed off about this.
2. Groupon is the most worthless piece of crap because of which I've ever been forced by my wife to do things. Deals are only marginally better than deals already available at the locations that you can't use if you're paying with a Groupon ($50 groupon for $25, and half off deals all over the menu on a regular basis that are only for normal people without the damn groupon), and there's a time limit on Groupon so there's a risk of attrition and a certainty of doing something when I don't want to do it.
Wow this pisses me off.
early 2012: packaging of user data into securities
mid 2012: derivatives on these securities
late 2012: crash
early 2013: SEC orders Americans to stop using their names until bankruptcy courts sort out ownership issues
Coupon 1 - 75% off Geritol sent to people who have bought Always Panty liners.
Result: Redeeming person is probably an older woman.
Coupon 2 - 75% off cannondale mountain bike to anyone having donated to the RNC.
Result: Probably young Affluent Republican
Forget about it if you can base it off more than one purchase or store locations.
Coupon 3 - 50% off diapers for anyone who has purchased pregnancy test && maternity clothes || co-pay on prenatal meds && made purchases near Redmond Town Center && pays rent in this apartment complex.
result: I now know there's likely a woman who's had a baby who lives in Redmond Washington in Shadowdale apartments.
Data mining can make these kinds of correlations not hard, especially if someone can use location and multiple criteria (as they can in Facebook). You don't need to have the personal information from the bank. Based on the products they buy from the coupon and the previously purchased products and store locations (think local stores with few or one location), you get a good idea of who they are PLUS if they use the coupon, you're probably getting their name as a part of the credit card transaction online.
So hello Mrs. Scott in Shadowdale apartments, how's your baby? Chances are they were healthy because you were on those pre-natal pills. Would you like to buy some life insurance? Sorry Mrs. Jensen, your baby is on formula, we're going to pass.
When is the last time you had a coupon with no code on it at all?
Learn to love Alaska
How does this work then? The customer has to redeem their buy-one-get-one coupon at some point. In order to get the discount, the customer would have to present the coupon to the merchant, right?
The only way I can see where the merchant would not know would be a rebate type of system as opposed to a coupon, where the customer would purchase two pizzas (presumably having to use the bank's card to do so) for full price, then the bank gives a rebate for the cost of one of the pizzas back to the customer. (later, the merchant would have to pay the bank based upon the number of rebates given out) However, I see nothing to TFA to indicate that's how it works.
Even so, I could still see a system where the merchant could figure out who's using the coupon by making the deal only work a certain way. For example the coupon could be only good for two large pepperoni and mushroom pizzas with two 2-liter bottles of Sprite (to paraphrase a rather odd deal I actually saw the other day). Now, there's no guarantee someone who ordered that specific combination is using the coupon/rebate, but I would say the chances would be pretty good.