Ads will soon be appearing in your online bank accounts.

Blind_Io

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http://www.washingtonpost.com/wp-dyn/content/article/2011/01/16/AR2011011603387.html?tid=wp_featuredstories

First they showed up in your e-mail. Then they found their way onto Facebook. Now ads are coming to your checking account.

As banks test new ways to make money and attract customers, they are tucking ads onto the list of recent purchases on consumers' online bank statements. The charge for your breakfast at McDonald's, for example, might be followed with an offer for 10 percent cash back on your next meal at the Golden Arches. There's no need to print a coupon - just click the link, and the chain will recognize your debit card the next time it is swiped.

"The one thing these debit programs have is a significant amount of transaction and behavioral data,"
said Mark Johnson, president and chief executive of Loyalty 360, a trade group for marketers. "You're going to see a big push to make that insight more sellable."

Online banking is the latest frontier in the controversial field known as behavioral marketing, in which detailed personal information is used to target advertising. Consumer groups have decried the practice as an invasion of privacy, particularly since users often do not realize who has access to the most intimate details of their lives.

"It's definitely troubling," said Justin Brookman, head of consumer privacy for the Center for Democracy & Technology. "Most people don't notice them, understand them or opt out from them."

The ads are the brainchild of three-year-old Atlanta software firm Cardlytics, though other companies such as Boston-based Cartera have begun offering similar services. Several banks and credit unions in the Washington area use Cardlytics' ad program, although the firm declined to name them, citing contractual agreements. At least two other local banks will launch the ads in the spring. Regions, based in the Southeast, is the largest bank to have publicly announced a partnership with Cardlytics.

Co-founder and chief executive Scott Grimes, who previously worked at McLean-based Capital One, said the company's software runs on banks' servers, so consumers' personal data do not leave their secure networks. Consumers can opt out of the program, he said, but only about 2 percent of the 10 million households using Cardlytics' program do so.
More than half of users click on a link to activate an offer within the first month. National chains such as McDonald's and Macy's have begun testing the checking account ads, and the company said advertisers receive an average sales bump of $5.49 for each dollar spent on marketing to current customers.

"This is a trusted channel where people are paying attention," Grimes said. "It's the power of the targeting."

But trust can cut both ways. As the amount of personal data online grows, businesses have had to walk a fine line between using the information for profit and creeping customers out. Facebook learned that lesson several years ago when it was forced to back away from efforts to publish users' browsing habits on public news feeds. And it has been repeatedly criticized for not limiting advertisers' access to users' information, sparking a short-lived but vocal movement to quit the social-networking site.
Such controversies prompted the Federal Trade Commission to craft guidelines that address how and when companies should notify consumers about who has access to their personal information. In addition, Sen. John F. Kerry (D-Mass.) has said he plans to introduce an online privacy bill.

Banks see the ads as a potential substitute for popular rewards programs that they say have become unaffordable because of tighter regulations in the wake of the financial crisis. The new rules sharply reduced the amount of money banks receive from merchants each time a debit card is swiped - a fee that was used to pay for customer perks such as airline miles or discounted merchandise. J.P. Morgan Chase, for instance, announced it will discontinue debit card rewards programs for new customers starting next month.

According to a survey by research firm Mercator Advisory Group, 58 percent of debit card issuers offered a rewards program in 2009. But the percentage of banks thinking about launching a program dropped to 17 percent from 24 percent.

"It's just not even possible to continue rewards at this level," said David Robertson, publisher of the Nilson Report, a financial newsletter.

The checking account ads offer banks an alternate way to make money off debit cards: The discounts are paid for by the merchants, rather than the banks, in exchange for the ability to narrowly target who receives them.

McDonald's tracked fast-food customers in Houston.
Nearly one in five who had been eating at a competitor redeemed an offer for 10 percent cash back on their next McDonald's meal. Among those whose debit card purchases showed they had spent at least $75 at fast-food restaurants over three months, 60 percent activated the offer.
"How do we go and monetize this massive online banking channel?" Grimes said. "Let's bring offers to people based on what they actually buy and what they're interested in, and not a bunch of spam."
If you aren't uncomfortable with just that first bold paragraph then you probably print your Social Security Number on your business cards.

Seriously, who the hell thought this was a good idea? If my bank started this BS I would opt out or possibly change banks. We have reached the point of ad saturation and the last thing I want when accessing my personal financial information is ads next to each of my purchases. And linking those ads to my debit card, are you fucking kidding me!? :mad: It's almost enough to make me go back to using cash everywhere - and I don't like carrying cash.
 

nomix

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Not in my net account. Usually takes at least one year before things like this come to Norway. At least it's just a year, if it's something useful, it takes three.
 

MadCat360

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Ads inside the bank account? How will anyone see it?

At least it's not a pigeon.


[youtube]http://www.youtube.com/watch?v=zPGjeAPrLog[/youtube]
 

TBoneUs

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lol, my bank (Regions) already tired this. Dumped their asses for it. Was the straw that broke the camels back.
 

GRtak

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I don't do my banking online. I don't understand why people do when there is no way to guarantee security.
 

Salanax

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To be fair, the actual idea is amazing and implementation extremely convenient for anyone looking for deals or who enjoys sorting through ads for something they want or like. That being said there's absolutely no way I'd want that sort of technology linked to my bank account or having access to my personal details and would be very uncomfortable if there was no opt-out option. Even as it is I almost exclusively use cash, but with something like this it would almost certainly mean always exclusively using cash. Would the bank give me ads for withdraw $100 get $105?
 

Cobol74

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They are not putting bloody ads in mine or else I will give the poor Indian Customer Service person hell and there will not be a script for that.
 

That American Girl

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I don't do my banking online. I don't understand why people do when there is no way to guarantee security.
I've done my banking online for years, and have never had an issue. There's a record for everything I do, I change my passwords often, and I keep track of my credit card, and my debit card. I check my accounts about every few days.

I know what I've bought, and what I haven't.

If someone were to 'steal my credit card info', trust me..I'd know. If a lot of weird stuff were to start showing up, all you have to do is call your bank and report it immediately. Almost every bank and credit card I know of will let you off the hook for fraudulent charges if you let them know right away.

My credit union says they will have the 'missing money' for bad charges back in my account within 48 hours.

The only check I write anymore is for my rent, everything else is done online.

Just don't do stupid stuff with your cards...or buy from..ahem..unknown sites, check for the 'https' prefix in your URL's...and know any websites policy for using credit or debit before you buy.

And just say no to those sad Nigerian Princes who really need your help. ;)
 
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YicklePigeon

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They are not putting bloody ads in mine or else I will give the poor Indian Customer Service person hell and there will not be a script for that.
This.

And to Blind_IO: This is why I have, and always will do, carry a small amount of "petty cash" (usually no more than ?20 in coins and/or small notes) just for such purchases. Worse still though is that me, Cobol and all the others in the UK who happen to have store "club" or "membership" cards already get targeted advertising. It's why I refuse to use them, as this pigeon does not like being tracked so easily...

Regards,

Yickle!

P.S. Just thought I best add, the clubcard I'm referring to is my mum's and I refuse to faff about trying to find the daft "keyring" token that I always (conveniently) forget to add to my keyring anyway... ;)
 
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GRtak

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I've done my banking online for years, and have never had an issue. There's a record for everything I do, I change my passwords often, and I keep track of my credit card, and my debit card. I check my accounts about every few days.

I know what I've bought, and what I haven't.

If someone were to 'steal my credit card info', trust me..I'd know. If a lot of weird stuff were to start showing up, all you have to do is call your bank and report it immediately. Almost every bank and credit card I know of will let you off the hook for fraudulent charges if you let them know right away.

My credit union says they will have the 'missing money' for bad charges back in my account within 48 hours.

The only check I write anymore is for my rent, everything else is done online.

Just don't do stupid stuff with your cards...or buy from..ahem..unknown sites, check for the 'https' prefix in your URL's...and know any websites policy for using credit or debit before you buy.

And just say no to those sad Nigerian Princes who really need your help. ;)

You take almost all of the right precautions and that is really good. But do you trust the security/IT person at your local bank? What about the various managers that have access to your information and remote access to the servers? I don't. They are the weak links in the system. They are prone to mistakes and extortion or getting revenge when they feel that they are about to lose their job. It takes me 10-20 minutes to go to the bank and do my banking, cheap insurance and I don't have to worry about a leak on my end or theirs.
 

maxtortheone

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Reminds me of my current IP that tried an ad stunt a couple of years ago. The first time you'd start your PC, all internet access was cut until you opened a browser and closed the ad they put there as a start-up page. You couldn't do anything about it. It changed in less than a week though, after some outrage.
 

Twerp128

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You take almost all of the right precautions and that is really good. But do you trust the security/IT person at your local bank? What about the various managers that have access to your information and remote access to the servers? I don't. They are the weak links in the system. They are prone to mistakes and extortion or getting revenge when they feel that they are about to lose their job. It takes me 10-20 minutes to go to the bank and do my banking, cheap insurance and I don't have to worry about a leak on my end or theirs.
Just because you don't use online banking doesn't mean someone doesn't have access to it with a computer. How do you think banks processes checks? There is always someone who can see your information.
 

rickhamilton620

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Just because you don't use online banking doesn't mean someone doesn't have access to it with a computer. How do you think banks processes checks? There is always someone who can see your information.
True, my credit union does a hell of a lot with computers than I'd expect. I know they'd never pull something like this as they're local, fairly small, and are pretty conservative to new technology. We just got Android and iPhone apps, for example, and none of the debit cards have RFID chips for quick payments. I know a lot of people don't like them, but I think it's ingenious and wished my bank would offer it.
 
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