Sneaking into the Data Business | Womble Bond Dickinson – JDSupra – JD Supra
It seems to hurt worse when we learn these companies are treating us like products. For example, I have previously written about how diet companies like Weight Watchers have encouraged people to send their DNA for evaluations, making unsupported (and likely unsupportable) claims that a genetically customized diet would help people lose weight. Once the company has the key code to your physical makeup, what will it do with that information? Will it sell that DNA information to others, gather a huge database of customer DNA readings and use it for drug development, or simply run its own analytics to learn more about effectively marketing to you? Diet companies arent saying all the ways they will use this data, but if the ancestry DNA programs are any guide, then nearly all options are on the table.
Diet industry may seem to have their customers interests at heart, but these companies have been known to push limits of marketing. The Weight Watchers company was being sued by the Federal Trade Commission for using a diet app to illegally gather information on children as young as eight years old without their parents consent. The Guardian wrote, The FTC alleged that the apps signup process encouraged younger users to falsely claim that they were above 13 years old, despite text that indicated to children below 13 that they needed to sign up with a parent. This company has been in the process of recasting itself as a lifestyle brand, including adding a digital community called Connect that adds another useful stream of data about its paying customers.
Is all this new data used to sell more subscriptions and services, or will it pimp those customers out to third parties for different kinds of sales? Twice as expensive for a basic subscription, newer diet company Noom is structured for the digital age with interactive daily content, intrusive online questionnaires and encouraged interactions with other users. More data allows more ways to use it.
You also dont expect your tax assistant to be vacuuming your personal data. The Washington Post undertook a data investigation of the major tax preparation organizations finding the little-discussed evolution of the tax-prep software industry from mere processors of returns to profiteers of personal data. Its the Facebook-ization of personal finance. While there is a federal privacy law preventing tax preparation companies from disclosing the contents of its customers tax returns to anyone beyond the taxing authorities, the big tax companies are asking you to grant them special permission to go beyond these default federal protections and use your return including your income, investments and mortgage details to help them upsell you on other things.
The companies call this customer upselling personalized service and promote it as customizing the tax preparation experience to your individual needs. If only they could figure out a reason for you to send a DNA sample, then their data personalization could really take off. DNA has as much use in tax preparation as it does in diet recommendations. The Post reports that H&R Block asks to share your data with its overseas affiliated companies. You can choose not to do so, and you can revoke permission after jumping through some hoops. The Post points out that tax company Intuit recently acquired Credit Karma, whose entire business model asks you to pay with your privacy for free services like credit scores. So it is clear that tax preparation companies like Intuit see their future revenues arising from treating their tax preparation customers as the products for data-hungry business customers. They have gathered a tax-preparing herd, and now they are milking it.
Other kinds of life advice companies beyond diet and tax-prep are surely moving into this data-rich space, and milking paying customers for more and more economically valuable data. Realtors, accountants, bartenders, feng shui consultants all of our advisors and vendors can adopt this data centric model. Who knows what your dry cleaner is capturing about your behavior?
Read your options carefully before entering into an advisor relationship. Make sure you understand what advantages the premium package provides, because you are likely paying for it with both money and chunks of your privacy. If you send or allow collection of extra sensitive information, confirm that you understand what the vendor will use the data for. New laws allow a broader window into the data habits of your advisors. Take advantage of the new knowledge.
Follow this link:
Sneaking into the Data Business | Womble Bond Dickinson - JDSupra - JD Supra