0 How Banks, Credit Cards Will Get Around Restrictions On Selling Your Info

Credit card companies are sitting on a wealth of information about their clients — they have a running record of everything they buy.

Due to strict rules entitling consumers to financial privacy, though, banks are limited in the secondary use of that data. However, they’ve happened upon a rather ingenious way to....                                        work around that restriction.

The Chicago Tribune reports on banks’ “billion dollar plan” to “sell your shopping data.” The story starts off (rather salaciously):

"Many of the nation’s leading banks and card issuers, including Wells Fargo, Citi, USAA,* Sovereign Bank and Discover, are selling information about consumers’ shopping habits — how much they spend, where they shop and what they buy — to retailers."

That’s a misleading description (and CNN Money later revised that article). Banks don’t actually hand any information about their users over to retailers. They’re “selling” shopping habits the same way Facebook “sells” personal data about its users: in-network.

It’s a clever privacy work-around. Just as Facebook allows advertisers to specifically target certain kinds of users based on their profile information (without actually providing that profile information to the advertisers), banks plan to allow advertisers to send deals and coupons to their customers based on what they’ve bought before. That way, no user data actually leaves the network — instead, deals just enter the network. Each time a customer cashes in on one of those deals, the bank gets a commission.