Money Consumer Customer loyalty programs ‘stealing’ data: Consumer watchdog
Updated:

Customer loyalty programs ‘stealing’ data: Consumer watchdog

Customer loyalty programs have been targeted by the ACCC for 'on-selling' data. Photo: Getty
Share
Tweet Share Reddit Pin Email Comment

Loyalty schemes could be benefitting companies over customers, according to a report flagged by the Australian Competition and Consumer Commission.

The watchdog on Thursday said while most Australians believed the loyalty programs were rewarding them for their patronage with discounts and points, some businesses were getting extra dollars from their dollars by on-selling customer data.

About nine out of 10 Australian adults are signed up to at least one loyalty scheme, and the average Aussie holds between four and six loyalty cards in their wallet.

ACCC chairman Rod Sims said the schemes’ privacy policies were frequently very vague and did not tell consumers who their data is being shared with and how it is being used, shared or monetised.

In other words, the companies are using their customers’ shopping habits as a secondary revenue scheme.

“Consumers may also be shocked to find that some schemes collect their data even when they don’t scan their loyalty cards, or that they combine it with data from other sources that they might not even be aware of,” Mr Sims said in a statement.

Australia’s top five most popular schemes are:

  1. Qantas Frequent Flyer: 12.3 million members
  2. Woolworths Rewards: 10.9 million members
  3. Velocity Frequent Flyer: 9.1 million members
  4. Flybuys: 8.3 million members
  5. Priceline Sister Club: 7.1 million members

The ACCC was quick to point out the country’s top schemes did not on-sell their members’ personally identifiable consumer data.

But the report found they did share or exchange their members’ de-identified, tokenised or hashed data – using a unique identifier instead of a name or email address – with third parties.

Call for change

The ACCC wants shopping loyalty programs like Woolworths Rewards and Flybuys to stop the automated linking of a customer’s bank card to their profile, in order to track transactions – which currently happens even when they don’t scan their membership card.

The biggest complaint from consumers for frequent flyer programs was the high carrier charges that are dropped on when they go to redeem their points for flights.

“Many people think they can redeem their points for a free flight, but in some cases, the cost of purchasing an airfare without using points may be similar to the cost of a flight using points once the airline adds on taxes and charges.” Mr Sims said.

The ACCC said the major frequent flyer schemes generated more than $7.2 billion for their operators from 2014-15 to 2017-18.

-with AAP

Comments
View Comments