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ACCC Wary Of Loyalty Scheme Data Practices

The National Watchdog is raising the alarm on loyalty schemes citing concerns over the amount of data collected from consumers with the Australian Consumer & Competition Commission (ACCC) reinforcing recommendations for privacy and consumer law from its September draft report.

Following the release of the draft report, released on 9 September, the ACCC is again pushing its recommendations, calling for loyalty schemes, such as those offered by airlines, supermarkets and hotels, to better inform their customers about the data they collect.

As covered by ChannelNews, it follows the federal government announcing it would delay its response to the Digital Platforms Inquiry report, handed down in July by the national watchdog, which laid out 23 recommendations from the National Watchdog regarding the dominance of the leading digital platforms and their impact across Australia’s economy, media and society.

The report reinforces recommendations from the Digital Platforms Inquiry Report regarding privacy and consumer law, with the draft centred explicitly on loyalty schemes and the data they collect, as well as processes that automatically links members payment cards to their loyalty scheme profiles.

ACCC Chair Rod Sims is calling on companies to improve how they communicate with consumers to help them better understand how these programs actually operate.

‘Our recommendations would protect consumers and help ensure consumer trust in loyalty schemes, in the digital economy and in data-based innovation, which is a benefit for the broader economy’.

Sims is suggesting simple changes including, ‘more prominently alerting customers that their points are about to expire’.

Data trading is also of concern, including the sharing of consumer insights with third parties which could result in increased targeted advertising; spam.

‘Many consumers are increasingly concerned about receiving targeted advertising, in some cases from companies that they have never dealt with before,’ said Mr Sims.

Privacy policies will be of importance to the ACCC with the watchdog concerned about their vagueness and how ‘they seek broad consents and discretions from consumers’.

According to the ACCC, supermarket loyalty schemes track customers credit or debit cards from previous transactions.

‘Many consumers would be shocked to find that some supermarket schemes continue to collect their customers’ data at the checkout even when they do not present their loyalty cards.’

What’s more concerning however is the potential of price differences for identical products or services as a result of the data shared to third parties.

The ACCC is calling on businesses to make improvements to their customer loyalty schemes, along with lawmakers to create broader legislative reforms to protect consumers using these schemes.

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