Who is using your private data for devious purposes?

Did you sign up for a loyalty program card over the Boxing Day and New Year sales?

Perhaps with a supermarket, at a bottle shop, chain store or travel group?

If so, that might have been a bad idea, says consumer organisation Choice.

Australians (and others) should consider the hidden cost of these services, and avoid signing up to more, says Choice consumer data advocate Kate Bower.

"Loyalty programs aren't free," says Bower. "The true cost of these programs is your personal data which can be used for manipulative practices and even personalised pricing.

"People might not realise that supermarket rewards programs share data and insights with their insurance businesses, while others could be sharing your personal information with data brokers. This is well beyond consumer expectations."

A recent Choice survey revealed 90% of Australians have signed up to at least one loyalty program. The survey also found that fewer than 10% of people who have joined a scheme always read the privacy policy and almost a quarter have never read one at all.

"Our survey found that 90% of Australians have signed up to at least one loyalty program," says Bower.

"We strongly believe people shouldn't need to read long and poorly written fine print in order to protect their personal information.

"Fewer than 10% of people who are part of a loyalty program always read the privacy policy and almost a quarter have never read one at all. Given how long and poorly written privacy policies are, it makes sense that people aren’t able to engage with them.

"Despite disclosures in terms and conditions or privacy policies, consumers probably don't realise their data is being collected and used by supermarkets or to what extent. Data can even be collected when you don't scan your existing loyalty cards."

The survey showed 40% of people weren't aware loyalty schemes could sell their data to data brokers, and roughly the same number (41%) didn't realise it could be used to make decisions about them, including their credit worthiness.

Choice also found that 70% of people are concerned about their data being sold to data brokers and 62% are concerned about schemes using this data to make decisions about them.

Choice is calling on the government to make urgent reforms to make sure that businesses use consumer data in clear and fair ways.

"The existing privacy laws are no longer adequate to cover the extent of personal data collection and processing," says Bower. "The government needs to review whether the privacy act is sufficient to protect consumers and ensure they have adequate control of their data.

"Businesses must take greater responsibility for data protection and the government must continue to pressure businesses to do the right thing. There needs to be less burden on individuals to understand exactly what personal data they are giving away by signing up to loyalty programs."

You can read Choice's full article on loyalty cards and data collection here.

Image: Scop.io