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    Recent Stories About Consumers and Tracking of Their Shopping Habits

    The tracking of consumers’ shopping habits (online and offline) for targeted behavioral advertising and other types of marketing is not new. There have been numerous news stories about this surveillance issue. For example, after the Wall Street Journal reported that credit-card companies Visa and MasterCard “are pushing into a new business: using what they know about people’s credit-card purchases for targeting them with ads online,” Sen. Jay Rockefeller (D-W. Va.), chairman of the Senate Commerce Committee, wrote to both MasterCard and Visa asking about the report. Also, the consumers have become interested in opt-out and Do-Not-Track remedies, including browser tools. (Read more about targeted behavioral advertising and privacy issues connected with it in a previous post.) Here are a few recent stories about the tracking of consumers’ browsing and purchases:

    BusinessWeek: Big Brother Is Watching You Shop

    On the Web, every click and jiggle of the mouse helps e-tailers customize sites and maximize the likelihood of a purchase. Brick-and-mortar stores have long wanted to track consumers in a similar fashion, but following atoms is a lot harder than following bits. […]

    To get a better understanding of their customers in real time, mall operators are monitoring shoppers’ behavior with devices that track mobile-phone signals, while retailers including Montblanc (CFRUY), T-Mobile (DTEGF), and Family Dollar Stores (FDO) are finding new uses for old tools such as in-store security cameras. The goal is to divine which variables affect a purchase, then act with Web-like nimbleness to deploy more salespeople, alter displays, or put out red blouses instead of blue. […]

    T-Mobile employs similar technology from San Francisco’s 3VR, a maker of security systems. Two years ago, 3VR executives realized that its cameras could be used to gather consumer data, according to the company’s CEO, Al Shipp. He says T-Mobile, in Bellevue, Wash., uses 3VR’s technology in some of its retail stores to track how people move around, how long they stand in front of displays, and which phones they pick up and for how long. T-Mobile declined to comment. Now 3VR is testing facial-recognition software that can identify shoppers’ gender and approximate age. […]

    Some retailers are installing gear to track shoppers via cell phones. Path Intelligence, a company in Portsmouth, England, started selling a technology in 2009 that records a phone’s cellular signal and follows its owner through a building. Today it’s used primarily by malls in Europe, and the company says its technology records the paths of more than 1 million customers every day. […]

    Path Intelligence says it doesn’t record anyone’s identity and alters some of the digits in each phone number before storing it. […] Not everyone is reassured. In November the Short Pump Town Center in Richmond, Va., and the Promenade Temecula mall in California began testing Footpath, the first such trials in the U.S. The test was suspended after one day following complaints from Senator Charles E. Schumer (D-N.Y.) that the technology could compromise shoppers’ privacy.

    Associated Press: Companies getting very creative with data about you

    As it becomes easier to gather information on consumers, businesses are crunching personal data in new ways to forecast a wide variety of behavior. In much the same way that credit scores predict how likely you are to pay your bills, a new generation of scores now rate the likelihood that you’ll take your medications or redeem a specific coupon.

    In some cases, transactions that were traditionally considered off the books — such as rent payments and payday loans — are being incorporated into the growing body of information used to size up customers.

    The new uses of personal data raise a host of concerns for consumer advocates, who question the reliability of the scoring models and the accuracy of the information on which they rely. Also troubling is that many consumers are oblivious that they’ve been tagged with these numbers, notes Chi Chi Wu, an attorney with the National Consumer Law Center. In many cases, consumers have no way to learn what their so-called consumer scores are. […]

    If you’re wondering how else businesses are rating you, here’s a look at four recently introduced scores you may not know about:

    Anyone who has applied for a mortgage understands the importance of credit scores. The three-digit figures not only help determine whether a bank will approve a loan, but its interest rate as well.

    Now a company called CoreLogic is developing a score it says will zero in on predicting a borrower’s likelihood of repaying a mortgage. The score will be based on a new breed of credit reports the company released last month.

    These reports gather information that isn’t typically listed on credit reports, including information from CoreLogic’s in-house databases of rental records and payday loan applications. Also included are public court records, such as property liens, evictions and child support judgments.

    Read the full story for more on three other types of scores that could affect consumers.

    USA Today: Consumers turn to do-not-track software to maintain privacy

    Upon reading recent news stories about how Facebook tracks almost everywhere he goes on the Internet, Jim Kress grew outraged. The consultant from Northville, Mich., subsequently learned Google, Microsoft, Yahoo, Adobe and many other companies also exhaustively track his online activities. […]

    So Kress, 61, did some homework about a powerful class of online tools and services — most of them free — designed to block online behavioral tracking. He began using a new free service called Do Not Track Plus from Internet privacy start-up Abine.

    Kress is part of a grass-roots movement that began to swell late in the year and is expected to continue growing in 2012: consumers taking online privacy into their own hands.

    Suppliers of the best-known anti-tracking tools — Ghostery, Adblock Plus and TrackerBlock — all reported big jumps in usage in the second half of 2011. Ghostery, for instance, is being downloaded by 140,000 new users each month, with total downloads doubling to 4.5 million in the past 12 months, says Scott Meyer, CEO of parent company Evidon. […]

    Online tracking has been a privacy hot potato for more than a decade. The relentless collection, correlation and selling of tracking data take place to help advertisers deliver more relevant ads to individual Web users. […]

    As this debate extends into the new year, consumer backlash appears to be gaining grass-roots momentum. More and more average Web users, such as Doug Toombs, 25, a quality assurance engineer from Cambridge, Ontario, are discovering and using available anti-tracking technologies while the global privacy debate continues. […]

    Meanwhile, average consumers who’ve already figured out how to use the current anti-tracking tools say the trouble is well worth it. […]

    Kress, the consultant from Michigan, says the main benefit he reaps “is knowing that my browsing and Internet activities are much more private and are not being pirated by a collection of miscreants intent upon benefiting themselves, at my expense, without my knowledge or permission.”

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