The hidden cost of Verizon’s ‘free’ data rewards program: your data

Privacy is the price of consumer loyalty deals that track your data, habits

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With the announce­ment of Ver­i­zon Up, a new wire­less rewards pro­gram that pro­vides users with cus­tomer incen­tives, first-dibs oppor­tu­ni­ties on things like VIP tick­ets and oth­er exclu­sive deals, we thought it was time to review how reward mar­ket­ing plans work.

First, the good news: Ver­i­zon Up is free!

Adam Levin, chair­man and co-founder of Credit.com and Cyber­Scout (for­mer­ly IDT911)

Like their intru­sive cousin the loy­al­ty pro­gram, reward-based mar­ket­ing schemes usu­al­ly require no addi­tion­al fees. In essence, Ver­i­zon Up is a cam­ou­flaged ver­sion of what author Seth Godin calls “per­mis­sion marketing.”

Now the bad news: Noth­ing is free. Ver­i­zon is mak­ing you pay with your per­son­al infor­ma­tion instead of mon­ey. But make no mis­take: They’re going to prof­it more than you will from the arrange­ment. (Note: Ver­i­zon did not return our request for comment.)

Nev­er were the words of the Ger­man philoso­pher Georg Wil­helm Friedrich Hegel more pre­scient: “To be free is noth­ing, to become free is every­thing.” Trans­la­tion: In the world of big data, there’s no such thing as “free.” If a com­pa­ny offers you some­thing for your data, you’re the prod­uct. They are mon­e­tiz­ing your information.

The eli­gi­bil­i­ty require­ments on Verizon’s web­site make this clear. Opt­ing in enables Ver­i­zon to per­son­al­ize mar­ket­ing sent your way by them, and by oth­er com­pa­nies, using your data.

What data?

These days “your data” is pret­ty much any­thing mar­ket­ing com­pa­nies can get their hands on. If you belong to a gym, it may be sell­ing that fact to a third par­ty, and with it pos­si­bly more data about how often you go and any­thing you bought there to enhance your workout.

If you use a mobile phone, your data could include every­where you have gone and most like­ly any­thing dis­cussed via text. Whether or not you use the pop­u­lar Waze app, there’s data on how fast you dri­ve, which in the wrong (or right) hands could affect the rates you pay for car insurance—never mind the pos­si­bil­i­ty that law enforce­ment could one day claim juris­dic­tion in the realm of cyber space-clocked speed­ing tickets.

When it comes to your data, the goal is to cre­ate a gran­u­lar por­trait of you—your inter­ests, likes, dis­likes, pas­sion­ate yearnings—all of it pre­pared and arranged for resale to com­pa­nies and orga­ni­za­tions hop­ing to match prod­ucts and ser­vices with var­i­ous aspects of your personality.

How spe­cif­ic does this get?

The kind of infor­ma­tion the big data com­pa­nies have—what con­sti­tutes “your data”—depends on your pri­va­cy hygiene. The less you share, the few­er times you opt in, the more pri­va­cy you will enjoy.

Com­pa­nies like to incen­tivize the shar­ing of per­son­al data. Some­times it’s by cre­at­ing some­thing fun, like a toy or gam­ing expe­ri­ence. The lure of social media is hard to resist but every like and com­ment becomes part of your sell­able data.

If you’ve ever signed up for a loy­al­ty pro­gram, every­thing you’ve pur­chased will be includ­ed under the head­ing of “your data,” pro­vid­ing a very spe­cif­ic win­dow into your life, not just sim­ple stuff like your gen­der and age—they already know that—but your health and habits based on what you buy. And of course, your cred­it card com­pa­nies know more about you than almost any­one else—including, prob­a­bly, you. (You can get an idea of what they see about you with a free cred­it report snap­shot on Credit.com.)

Noth­ing to see here

Remem­ber the sto­ry about the emperor’s new clothes? Basi­cal­ly, he didn’t have any. That’s the deal here. And while Ver­i­zon is not alone in per­pe­trat­ing a con­sumer data grab, their recent announce­ment makes them today’s blue-plate special.

As is the way with this kind of offer, Ver­i­zon Up will pro­vide users with some perks, but for what? And is it a fair swap?

To be clear, when­ev­er the right to use your data, with­out lim­i­ta­tion, is the ask, say­ing “yes” is nev­er going to be the answer I rec­om­mend. It doesn’t mat­ter what you’re get­ting for it. In this case, Ver­i­zon is ask­ing to mon­e­tize the data on prod­ucts and ser­vices that you use (and pay for) as well as far more per­son­al stuff, “includ­ing loca­tion, web brows­ing and app usage.”

Does this mean your iPhone Safari brows­er can be set to “Pri­vate” and it doesn’t mat­ter? Inter­net ser­vice providers can see any traf­fic that doesn’t move via vir­tu­al pri­vate net­work. So, is every­where you go online still vis­i­ble, able to be sold to a third par­ty no mat­ter how private?

It doesn’t mat­ter. Get in the habit of say­ing no.

When it comes to pri­va­cy, you need to be your own advo­cate. As Toni Mor­ri­son said, “Noth­ing and nobody is oblig­ed to save you but you.”

 Full dis­clo­sure: Cyber­Scout spon­sors Third­Cer­tain­ty. This sto­ry orig­i­nat­ed as an Op/Ed con­tri­bu­tion to Credit.com and does not nec­es­sar­i­ly rep­re­sent the views of the com­pa­ny or its partners.

More on iden­ti­ty theft:
Iden­ti­ty Theft: What You Need to Know
3 Dumb Things You Can Do With Email
How Can You Tell If Your Iden­ti­ty Has Been Stolen?