• Dave Bates

Please stop using privacy policies to steal from customers



A cautionary tale on "the fine print"


The evolution of the internet has led to a lot of "free" resources. Whether or not something is truly free depends on the motives of the person behind the offer.


There is *always* a person behind the company making the offer. Sure, there's a strategy, a policy, organization, a boss, an owner - but there's always some person who defines what "free" actually means.


In most cases, when we use a free service or download a free resource, we become the product. We trade something of value - an email address, for example - in exchange for something we hope will be of value to us.


What happens when we actually pay for a product? More specifically, what happens when we pay what we believe is the fair asking price for it?


Most consumers would agree that a person who pays for something, advertised at an unqualified price (aka, there aren't any asterisks or fine print), has a reasonable expectation their status changes from "the product" to "the customer".


We recently decorated the house for the Christmas holidays. For years, we've used a set of plug-in outlets that have a separate remote control. It is a convenience and prevents things from accidentally falling off the shelf when someone pulls a little too hard on the cord. Sadly, the remote suffered too many drops and no longer works. We decided to replace them with a set of internet connected outlets.


When I got to the store, I noticed this message prominently displayed on the package:



50% of net profits donated to charity


This was an intentional signal of a socially responsible technology company.


It was also total scam.


The Fine Print


When I got home, I downloaded the app and started to make a new account. I'm an ops guy so I read all those pesky contract terms most people skip. Privacy policies are among my favorite because they're often filled with all kinds of important rights we are signing over. (Note that this doesn't just happen in privacy policies, it happens in all kinds of other agreements too but that's a topic for another story.)


Privacy policies are usually filled with stock legal jargon. More often than not, the terms are for the company's protections and to notify the customer about how our data will be collected and used when we use the platform or service.


Here's the scam:



By accepting this (non)Privacy Policy, I would allow the company to track 100% of my online activity and sell it for a profit from which they alone would benefit.


If it isn't obvious, the scam is that the company requires customers to pay for the privilege of being the product.

An Important Distinction


Most companies collect anonymous user, usage, and performance data. Used correctly, these are valuable tools for making things better.


Unfortunately, this company goes a step too far. They bury their intentions deep in the privacy policy and far behind their "socially responsible" marketing copy on the package itself.


The company's business model is to sell a product under the pretense that the buyer is doing something socially responsible. The story they tell is that our purchase is actually an investment in a better, more charitable world.


It's unethical because they're presenting a false bargain.


In reality, their goal is to sell the customer's data to the highest advertising bidder. They buried the real goal in an obtuse reference to "may include...pages you're interacting with" in the privacy policy. In effect, every site you visit on the internet from the device on which their app is installed.


Here's a statistic USA Today and others cite that demonstrates how easy it is for unethical business people (individuals, not the companies behind which they're hiding) like this to steal from their customers:


A Deloitte survey of 2,000 consumers in the U.S found that 91% of people consent to legal terms and services conditions without reading them. For younger people, ages 18-34 the rate is even higher with 97% agreeing to conditions before reading.

How many people would buy if the package itself said:


"100% of your internet browsing sold to the highest advertising bidder!"


If most people knew what you were going to do and would say "no, thanks", there's a good chance your value proposition and business model are broken. Hiding your intentions deep in a privacy policy or contract the statistics say people won't read isn't ethical.



What Can You Do?


As someone who makes things for other people you should always be up-front about what you are offering.


If:

  • people won't buy it when you are transparent, there's a good chance the business practice isn't ethical.

  • you hide behind "it's in the policy", there's a good chance you're being deceptive.

  • you highlight a desirable practice (giving to charity) to offset your hidden agenda, you're probably drifting close to sleazy marketing and sales tactics.

Can we all agree that the world will be a better place when we're transparent, ethical, and generous in our marketing, sales, and delivery practices?



Caveat Emptor - "let the buyer beware"


There will always be unethical people behind the products and services we buy.


As a consumer you should always read the contract. Any contract. If you don't understand what it says, educate yourself.


In case you're wondering, I didn't create an account. I returned the product to the retailer from whom I purchased it. I've looked at a lot of Internet of Things (IoT) plugs lately and, sadly, with very few exceptions most of them have the same business model.


Of course, I'm not telling you the brands because, well, that's information about my shopping habits and I own it - for now.



I'm committed to helping business owners and their teams bring integrity and consistency to their entire organization - from marketing through support (and everything in between).


If you're interested in taking specific steps that improve transparency with your customers, there's a good chance I can help. Why not schedule a call or fill out my contact form and find out?



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