Hacking, Consumer Purchase Data, and Pyramid Schemes

Good Evening Ladies and Gentleman. Welcome to Late Night Critic.

The Olympics in Sochi this year have brought to light a huge problem in our technology driven world, the hacking of our private information (story seen to right). This data could come from a cell phone or from a company keeping track of credit card information. The problem is a hacker could access all of our information at the click of a button. All they need is a computer and the program to do the work for them. They could be sitting in their pajama's just waking from a comfortable slumber, meanwhile they are destroying your personal information. From bank records to keeping a pregnancy private, today I want to discuss why people today depend on technology too often.

If you haven't been following the Olympics closely you may not have noticed the story on Russian hackers. A more local example of an attack on our consumer privacy was during the 2013 holiday season. Who was the target of this attack? Target of course!

How does a company as big as Target get broken into from across the globe? The hackers got access through the use of another companies credentials. Companies today are becoming more and more interconnected as networking developments allow us to become closer despite being long-distances apart physically. Companies give database access to their partners so they are able to work seamlessly and efficiently. This is where the problem stems from, there are so many pathways to get to the database that its near impossible to keep them all safe. The hackers (rumored to be from the Ukraine) simply got access from a partner of Target's, or from a Target employee, and went to work from there.

Target, in my opinion, has done the best they could to make up for this breach. They alerted all possible victims and have worked tirelessly with banks to solve the problems. It's just important for all parties involved to know that this could have happened to any company.

Another example of a company being used to retrieve private information is Verizon. Below is a video that explains it pretty well, but the point is even in America our phones aren't necessarily always safe.

To be honest, I depend on technology as much as anyone in this world. That probably isn't good, but the alternative is to lose efficiency and fall behind socially. Businesses have custom built share folders, that allow work to be done at all hours of the day. School's have the ability to check for plagiarism with the push of a button. There are numerous free services that allow an individual to work on a document with a group of people at the same time, from their desktop or even their phone (Example: Google Drive). I think that all we can do is be careful with the information we put into our electronic devices and do our best to encrypt the private data that is transferred across the internet.

With all of the hacking of information occurring many people find themselves asking why it is so important for companies to keep personal information at all. Is it fair that companies keep purchase records, credit/debit card information, our address and/or phone number? I feel that it has the ability to be used fairly and in a positive manner. I have two examples of a company using purchase data, lets look into Target and Safeway.

First, I have to start with another reference to Target. A while back a teenage girl got a mailer from Target, normal stuff. However upon opening the mailer the teenager, and her entire family, noticed the whole thing was built around maternity clothes, baby cribs and the like. It was a specific mailer for a pregnant woman. Long-story short, Target had determined the teenager was pregnant before she had told anyone else. This obviously felt like a huge breach of privacy. And left Target looking into their consumer privacy policies. Now Target is more careful about the mailers they send out, they simply mix in other products with the customized coupons. By doing this the mailer looks much more generalized but still produces the same purchase-inducing effect.

Target was originally breaching their use of customer information here. It is fair and beneficial for all parties if a consumers purchase history is utilized to send specific coupons for what they are already buying. But to also "predict" the current state of the consumer (pregnancy in this case) and then to basically let on to the fact that the company knows of that state is just plain creepy. Target's "Guest Marketing Analytic's" department does their best to keep the targets of their data from feeling spied on. However at the end of the day, if the customer doesn't feel spied on then they are only benefiting from coupons being catered to them.

Safeway, and their rewards program Just 4 U, also uses customer purchase data to determine what consumers get what discounts. Their system tracks all purchases made on a card and then posts customized coupons just for the specific products that consumer buys, when available. This is a huge benefit to consumers, with no real down side.

There are even reports of some malls and stores in America being able to locate customers via their smart-phones and then send them specific coupons or deals based on their location. The Federal Trade Commission is currently looking into this technology to confirm its anonymity.

Overall, I feel that the use of customer purchase data walks a fine line between helpful and creepy. The key is how the data is used, how the consumer views the results of their purchase history, and how a company keeps that data secure. If a company is able to use the data to produce deals and ads based around the consumer all the while keeping their information safe, I see no reason why we shouldn't welcome this method with open arms.

Best Business Blunders

Pyramid Scheme's
Recently a friend of mine was nearly duped by a "pyramid scheme". What is that you ask? I have a handy diagram to help explain! (There's also a definition in the quotes above!)

Basically a pyramid scheme is a continuous loop of people asking other people for money and taking a portion of that money with the rest going to the head honcho. Then the new people do the same to some of their friends and the money works its way up the chain. Eventually people realize there is no real product changing hands or the base of the pyramid cant fulfill the investments of the individuals above it. Then the pyramid falls apart and the only real winner is the first "member" of the company.
Pyramid schemes aren't easy to spot, they come in all shapes and sizes. Gone are the days of simple investment scams. Today, what may seem like a legit business could just be a pyramid scheme hidden behind smoke and mirrors. It's important for people to truly understand what to look for, so they don't invest in a company only to end up losing money.

So what is the lesson learned? When told about "the next big money maker" be wary. Some things are too good to be true.

Thank you for reading,

Alex Oldfield