Large online financial services providers and retailers have been boosting profit margins by using individual pricing. How does it work?
The companies aggregate data about you personally, including your financial information, location, and browser history.
For example, if you make $45,000 a year, live in rural Alabama, and your browser history is filled with visits to coupon-clipping websites, chances are you’ll be offered a better price than someone who makes $1,250,000 annually, lives in an affluent suburb, and has a browser history showing shopping for a new Mercedes G-Wagon.
Done correctly, surveillance pricing is legal (for now).
Yet the discrimination implications of such individualized pricing, plus the sense that some consumers are getting screwed in the process simply because of their net wealth, is enough for the U.S. Federal Trade Commission to start investigating.
The FTC has recently requested information from 8 companies about how this personal data is being used (abused?) to set individual pricing. Needless to say, there are both privacy issues and potential unfair and deceptive trade practices being looked at as part of this investigation.
This is just one of many legal issues that can get a website owner in trouble with the FTC, states’ attorneys general, and other government agencies.
Now if you’re unsure whether or not you’re breaking the law with the way you do business online, it’s probably time to schedule a phone consultation with Website Lawyer Mike Young before it’s too late.
