The Australian Competition and Consumer Commission (ACCC) has called for new laws to protect consumers using loyalty schemes from having their private information used to attract targeted advertising.
In its report, Consumer Loyalty Schemes, the ACCC recommends that loyalty schemes improve their data practices and stop automatically linking members’ payment cards to their loyalty scheme profiles.
It also calls for broader changes to consumer and privacy law.
Chair of the ACCC, Rod Sims said he was calling on loyalty scheme companies to improve both their data practices and how they communicated with consumers, to help consumers understand how the programs operated.
“Even simple changes, such as more prominently alerting customers that their points are about to expire, for example, in the subject line of an email, could help prevent a consumer from losing points earned over several years,” Mr Sims said.
“The ACCC is also concerned that the profiling of consumers based on the data collected by some schemes, including through the sharing of consumer insights with third parties, could result in consumers receiving increasingly targeted advertising.”
He said this could also potentially result in different consumers being offered different prices for an identical product or service.
“Many consumers are increasingly concerned about receiving targeted advertising, in some cases from companies that they have never dealt with before,” Mr Sims said.
“There is also an emerging risk of real consumer harm if individual consumers were to be charged inflated prices based on profiling derived from their data.”
As an example, he said that if a person’s frequent flyer data or online search history indicated they could travel only on certain dates, or based on their income, geographic location or other information collected through the loyalty scheme, they might be charged extra.
The ACCC’s 137-page report can be accessed at this PS News link.
