Do you love those customer loyalty schemes - the one that promise more rewards the more you spend, spend, spend?
Nine out of ten of us do. In fact, the average person carries between four and six loyalty cards. Some schemes have more than 10 million members!
But the Australian Competition and Consumer Commission (ACCC) has gone public with its concerns. If they’re worried, so should we.
The ACCC listed the following concerns:
- whether consumers receive the benefits advertised by loyalty schemes
- unilateral changes by loyalty schemes to their terms and conditions, and poor communication about how their schemes work
- poor disclosure about how consumer data is used and shared, including selling insights from consumer data to other parties without consumer knowledge; and
- the sharing of consumer data with unknown third parties.
The draft report raises concerns about the opaque terms and conditions of loyalty schemes, which prevent consumers from making informed choices that align with their privacy preferences.
Consumers also have limited control over how their personal information and other data is used and with whom it could be shared.
“The data that loyalty schemes collect can be used to profile consumers and produce insights about their purchasing behaviour,” ACCC Chair Rod Sims said.
“These insights about consumers may then be shared with or sold to third parties.”
Some schemes even collect your data even when you don’t scan your card, or the information they get is combined with data from other sources that you are not even aware of.
The ACCC has put loyalty program operators on notice.
It wants providers to review the way they explain to customers how their schemes work, and how they notify their consumers of any reductions to the benefits offered.
The ACCC expects to release a final report in late 2019.
If you would like to make a submission in response to the draft report, you can do so by 3 October 2019.