[alt.activism] POS data collection and frequent buyer programs

jgd@Dixie.Com (John G. DeArmond) (04/06/91)

imp@Solbourne.COM (Warner Losh) writes:


>The Safeways around here have something called a preferred customer
>card.  If you make more than $100 in purchases, you start to get
>coupons for free stuff (these are fixed, everyone gets the same
>coupons).  Does anybody know if they record the purchases as well?


Yes.  This is probably the most insidious form of privacy invasion 
currently underway .  Before I describe what is going on, let me 
qualify myself.  Up until about 6 months ago, I was a software
development manager hired as a consultant to manage the development of what
was/is to be one the largest personal lifestyle data collection systems
in the nation.  This system will be known as GiftLink (a name change
may be in the works) and is a joint effort between GTE, several of the
major consumer goods manufacturers and Kroger (mainly as a test market).
I left the project after I realized what was going on.  I've sat quiet
for these 6 months even though I had no contractural obligation to
do so but now it's time to speak out.

What you buy, what sequence you buy it in, when you buy and where you
buy is considered to be some of the hottest data available today.  All
kinds of schemes are being tested, from smart carts in some Kroger
stores here in Atlanta that track your motions through the store to
much more evil schemes such as GiftLink.  

There are several competing products to GiftLink already on the market.
Citibank operates probably the largest one.  The safeway system is 
yet another.  In most cases, the program is passed off to unsuspecting
customers as nothing more than electronic trading stamps.  The customer
simply subscribes to this neat incentive buying service, gets a card
that is presented during each checkout, and in return, they get trinkets
as a reward for unwittingly giving away intimate details about their 
life.

Here's what happens.  All modern Point of Sale (POS) systems have the
capability to collect extremely detailed transaction records.  Typically,
the UPC code, the time&date stamp, the quantity, the checkout lane and
the price are  captured.  When special software called demographics code
is installed on the POS computer, the purchase transaction consisting of
all the individual item records can be associated with an identifying
number. 

This scheme was originally developed to assist in test marketing. People
would be given code numbers - not associated with any individual but with
groups - and asked to give the number at the checkout.  Thus, general
buying demographics could be collected while not invading the privacy
of an individual.  The frequent buyer people realized that this scheme
could be extended to allow a number to be assigned to each customer
which would allow tracking purchase habits in great detail.  This data is
so valuable that in the event the POS system is old enough to not collect
all the detail, snooping hardware has been built that literally logs
the cahsiers' keystrokes.

The system I designed is intended to collect data from the thousands of
participating stores around the country, filter it, and transmit it to a
mainframe  for further processing.  This massive database stores each
item you buy while participating in a frequent buyer program as well as
when and  where you bought it.  EVERY SINGLE ITEM.  Citibank (and
probably others) have been doing something similiar with credit card
purchases for years.  This is  much worse, however, because the use of
coded membership cards coupled with UPC coding on all products allows
collection detail not possible from credit card invoices.  Plus data can
be collected even on cash sales.  

Obstensibly this data is to be collected into 2 databases.  One contains
all the detail associated with user id numbers.  The other contains
summary data along with identifying information such as name, address,
phone number, etc.  In the case of GTE, they state that they will not
merge these databases.  It is my opinion that they cannot avoid merging
the databases because a) they do not have absolute control and b)
the data is simply too valuable.

It may not be obvious what this system can do to the private individual.  
I'm going to point out a few things.  Since these databases contain
information on every single item you buy under the program, incredable
detail about your life can be modeled.  For example, it is trivial to
figure out how much red meat and high chlorestrol foods you buy.  Or 
how much booze or beer you buy.  Or when your wife buys an early
pregnancy test.  Or what OTC drugs you might buy in order to treat 
illnesses that you don't want on the record.

Consider what this information is worth to the insurance industry.
Consider how much they would pay for this information.  Then consider
how long this data is going to be kept confidential.

Worse, consider the INACCURATE conclusions that can be drawn from 
analysis of this data.  Your buying fatback meat for your dog
could flag you as a high heart attack risk.  Your buying an EPT test
kit just to see what's in it could flag an incipitent pregnacy.
Your buying a lot of beer to season the food that you cook and donate
to the local old folks shelter could flag you as a drunk.  It would 
do well to remember how compassionate the insurance companies are
to people that they can legally screw.

Or consider what the IRS could do toward lifestyle modeling if they
had access to accurate figures on your total outlay for food and
other essentials.  Suppose you spend more on food than the model assumes.
You get audited because the model says you're probably not reporting
part of your income.  Remember that with the IRS, you are guilty 
until proven innocent.

This is a call to action.  Forceful action should be taken at once.
The first thing that you can do is to NEVER give ANY identifying 
information to a store.  Not even your phone number.  A phone
number is all that is needed to match your transactions to your name
and address.

Secondly, always pay in cash.  Not checks, not debit cards but good
old greenbacks.  One of the best ways to mask your habits is to always
get your money from the same automated teller, and always for the same
amount.

Third, if you detect your favorite store messing around with any
kind of customer tracking programs, complain loud, long and often.
Nail the store manager every time you go in.  Write letters and 
make phone calls to the store's home office.  Write letters to your
newspaper.  Consider a petition campaign.  Also consider windshield
flyers for cars in the parkings lots.  (lightening speed is necessary
here :-)  Consider door-to-door or neighborhood handbill campaigns.

Polls show that an overwhelming majority of people today are 
concerned about their privacy.  This is the issue that can
catalyze people to action.  All people need is a well defined
evil to focus on.  Just as the LA cop beating galvanized people
against the cops, so can this issue motivate people to fight for
their privacy.  Let's do it!!!

John

-- 
John De Armond, WD4OQC        | "Purveyors of speed to the Trade"  (tm)
Rapid Deployment System, Inc. |  Home of the Nidgets (tm)
Marietta, Ga                  | 
jgd@dixie.com                 |"Politically InCorrect.. And damn proud of it  

marks@ssdevo.enet.dec.com (Randy Marks) (04/11/91)

In article <9296@rsiatl.Dixie.Com>, jgd@Dixie.Com (John G. DeArmond) writes...
[very informative article about POS data collection deleted]
I'm wondering if the same thing is going on with these new services
which allow you to pay your bills by phone.  The info is not as detailed
as the POS scanners which John described, but it does allow a central
electronic collection point to amass data about your household which
is not available otherwise.  I chose not to subscribe to such a bill
paying service for this reason.

	Randy Marks
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