Saturday, February 23, 2008
[privacy] ChoicePoint Gets A New Parent
We have been highly critical of information services company ChoicePoint (
NYSE: CPS) for years, ever since
they admitted selling private consumer data in early 2005. Identity theft was starting to ramp up as an American consumer's worst nightmare, data was sometimes being lost or stolen, but this was the first time in recent memory that a company collecting the data admitted that it sold more than 140,000 consumer records to individuals posing as businesses.
The timeline grew as gruesome as one might expect. Only one week later, ChoicePoint admitted that they
knew about their data breach as early as October 2004, but were working with law enforcement. We were critical and remain critical of the decision to suppress news from consumers about a deliberate breach of consumer information.
Congress justifiably got involved, but little came out of the federal government's queries, something we see repeated too often. This time, however, the Federal Trade Commission stepped in and chased down ChoicePoint's processes. A year later, the company announced it would pay a
$15 million fine, including $5 million for consumers, to settle the FTC's complaint that ChoicePoint did not have adequate safeguards in place.
The only time we believed the company was being harshly treated was when a coalition made up of nearly every state bellied up to the trough and
beat another $500,000 out of ChoicePoint. We said then and believe now that this was just a money and headline grab gambit and did little to help consumers.
Now an even bigger information company, Reed Elsevier (
NYSE: RUK) which owns information company Lexis-Nexis among others, has stepped in with $4 billion or so to buy ChoicePoint. The premium being paid for the information housed in Georgia-based ChoicePoint is staggering. Less than one month ago, the market value of the company (as determined by its stock price) was about $2.3 billion. While stocks have been battered and there are value buys out there, this is akin to Microsoft trying to take on Yahoo!
We can (and do) argue both sides of consolidation at Consumer Help Web. Concentrating data in a few companies allows for more stringent regulation, tighter controls and a wider spotlight. At the same time, the mess our nation's three major bureaus have created finally caused the government to legislate that consumers receive free access to each company's report every year to examine the report for errors. That is a lot of power to put in the hands of a for-profit entity.
We see the same issue with Google now. We adore Google for its groundbreaking contributions to Internet searching. At the same time, multiple consumers in multiple consumers have expressed to us their concerns that the search company is gathering a picture of consumers that is too detailed. Indeed, search queries and other information are associated with Google accounts and create a history of what was searched for by a person. That's not a marketer's fantasy, but a consumer's nightmare. Every unimaginable intensely private search query is dutifully logged by massive computer centers and tied to an individual.
That is why we are not fans of Google's proposed Health offering, why we think Microsoft's Health offering has failed to gain traction and why we are very concerned about the merger of two giants like Reed Elsevier and ChoicePoint, even if the latter has been learned a painful lesson.
Labels: ChoicePoint, data breach, Google, Microsoft, privacy, Reed Elsevier
Thursday, November 15, 2007
Microsoft Will Help Parents Limit Video Game Time
The Family Timer is Microsoft Corporation's latest attempt to garner support for its Xbox gaming console. The
technology company has announced a deal with the PTA to promote a new feature that allows parents to set automated time limits on how long the console is used.
Microsoft cited a study that claimed nearly half of parents surveyed stated that setting responsible limits on the amount of gaming time created "tension". We think that's called parenting and while an automated solution (available via download next month) is a good way to help parents remember how much time is left, especially in large families, the best solution for most families is to work together to find the right amount of time for each child to play.
Credit goes to Microsoft for attempting to work with organizations like the PTA and the Boys and Girls Clubs, but education and diversity remains the most effective tool.
Labels: Microsoft, video games, XBox
Saturday, September 29, 2007
Don't Be Stonewalled - Cases of The Week - September 29
Three of Consumer Help Web's cases this week underscore the need for consumer education throughout the country. Too often, the task is left to underfunded government agencies or the very businesses impacted (usually negatively) by well-informed consumers.
With that in mind, we selected three case studies this week where ordinary consumers like you or any of us were stonewalled by a company's representatives. The issue is not that the individual complaints were not heard, but that they were not heard by empowered decision makers.
We often talk with consumers who receive a response from a businessperson and grumble, "I don't like what they said, but I understand it." And understanding the business perspective is one of the steps in becoming a smart consumer. More important than that understanding, though, is how far and hard to escalate the matter. That escalation is our common theme this month.
The first case is a Washington, D.C. consumer who bought a Jeep at
Farrish of Fairfax. The dealership is a well-regarded one. Even
bbb.org, an organization that tries hard but is still an organization driven by business membership dues, notes that they have only received four complaints about the dealership in the last year. For a dealership of their size, that is a record to be proud of.
Unfortunately, our customer got stuck with a bad vehicle. Things happen. That is why there are managers and resolutions. But when George interviewed our client, he quickly learned that the sales team had buffered the company's management from the Jeep that kept experiencing mechanical difficulties. We learned that despite numerous unsuccessful repair attempts,
Farrish of Fairfax left this consumer with a huge potential lifetime value in the cold. Now the consumer has contacted us in a prelude to what could easily become regulatory or legal action.
While the sales team may have thought the problem would go away, the situation simply escalated. We always train consumers to state what they want as a resolution and ask one simple question:
After hearing what I want to resolve my complaint, are you empowered to take that action? If the person you are dealing with says they are, then don't compromise if you are correct. If not, then it makes great sense for everyone to move up the ladder.
Our second case was a consumer traveling on Continental Airlines. She told us that her luggage was broken on a vacation to Mexico. On the return trip, though, she arrived and the luggage didn't. The airline promised the luggage would arrive, but it didn't. When it finally did arrive, our customer was forced to return to the airport to get her bag, where she quickly discovered that her digital camera was missing. Worse, the pictures of her vacation were gone, presumably forever.
"They didn't even offer me an overnight kit," this consumer told us. But they should have, and likely would have, had they been pushed to do so. Even more important, the airline should have delivered the bag to this consumer rather than compelling her to return to the airport. As for this missing camera, a Continental employee reportedly told her that filling out a form was a waste of time. But that's the only way that Continental would have even filed a claim.
Knowing how far to push the empowered person is just as important as knowing who to push. This consumer did too much of the airline's work and is paying the price for it now.
The final case we selected this week was a lovely woman who bought her teenage son a Microsoft
Zune music player. The teen not only constantly used the player, but even downloaded songs form Microsoft rather than the ubiquitous Apple
iTunes store. When the family saw a dark splotch on the screen, they didn't immediately act. The area of the malfunctioning screen spread and soon, the music player stopped working.
The family called Microsoft, where a customer service representative reportedly told them that the
Zune player would not be covered under warranty because it was damaged by the user.
But how could a phone rep who never saw the device know that?Exactly. They couldn't and didn't. Instead, they stonewalled the consumer, but this consumer was smart enough to fight back.
When you're faced with a stonewalling customer service representative,
ask nicely for the name of that person's immediate supervisor. Then ask to be connected to that person. If the representative refuses or offers someone else, hold fast. Climb the corporate ladder until you speak with someone willing to take action.
We'll keep you all apprised of what happens with these consumers and the companies that stonewalled them.
Labels: consumer, Continental Airlines, customer service, Farrish, luggage, Microsoft, Zune
Thursday, August 23, 2007
The Wheels On The XBox Burn, Burn, Burn
Microsoft Corporation announced yesterday that an add-on
device for their XBox 360 game console can overheat. No fires, injuries or other problems have been reported, but the company received dozens of complaints that the unit overheated and smoke was visible.
The company said consumers could fix the problem with the "Wireless Racing Wheel", but cautioned consumers that they should not use electrical power when using the device until they received a repair kit. Microsoft did not say when the kits would ship, and the federal government has not issued a recall notice.
The new console from Microsoft has taken its share of abuse. With a larger Sony installed base and tremendous buzz around Nintendo's Wii, Microsoft's XBox was best known for its "red ring of death", the lights that displayed when some units locked up. The phrase was a play on words based on computer user's referring to failures in the company's Windows operating system as a "blue screen of death".
Blue or red, unplug your XBox's steering wheel until it is repaired.
Labels: Microsoft, safety, XBox
Wednesday, August 22, 2007
Skype Antes Up Resolution
When eBay's Skype phone service crashed last week, users throughout the world were faced with a spinning icon and wasted computer cycles. The company later said that the crash's scope was international and cited stress caused by millions of computers rebooting after receiving an updated Microsoft patch.
Pundits throughout the blogsphere and traditional media continued to ask why this particular update, one of many Microsoft regularly sends subscribers, caused the crash, but the company would only state that the crash was unintentional and not the work of hackers.
Many of Skype's users have free accounts, the remnants of a well received promotion that offered free service to any landline phone during 2006. Millions of users pay for varying levels of service, however, including local phone numbers, the ability to call any phone and reduced international calling rates. To compensate users, Skype has added a week to any paid subscriber's account.
Labels: eBay, Microsoft, Skype
Tuesday, June 12, 2007
Best Buy Woes Continue
The wagons are undoubtedly circling in Richfield, Minnesota.
That's where Best Buy President Brian Dunn presides over a massive retailer that booked $1.3 billion in net income from $35 billion in sales. The 46 year old Dunn has successfully navigated choppy waters in big box retailing that consumed other players. Income is up, share prices have more than tripled in five years, and there is even a little dividend built in for value investors.
Until recently, Dunn's biggest headache was likely the stock price that had essentially stalled for two years. Now he faces revisiting a headache from
four years ago, when the giant retailer and Microsoft were accused of deceptive trade practices in luring consumers to the latter's Internet service. And the folks in Connecticut aren't helping either. Here's why:
The original case was tossed out in 2003, but now Wall Street is jittery because a Best Buy attorney has
admitted that he altered documents related to the case. The 9th U.S. Circuit Court of Appeals has
now ruled that the companies must stand trial again, this time for violating the RICO Act, more commonly associated in the public's mind with gangsters and organized crime.
On top of those headaches, Connecticut's savvy Attorney General Richard Blumenthal is finally bringing suit against Best Buy on an unrelated matter that the local press broke weeks ago. According to reports, Best Buy used a in-store website that looked identical to its commercial website but showed hire prices. This type of scam was common in the home improvement industry for decades, allowing contractors to show an "invoice price" and then add a healthy markup when the actual price was different. In a reversal of that idea, Best Buy allegedly showed in-store customer higher prices then were actually advertised on the web on a site that looked identical to the store's regular web site.
Blumenthal's comments about the suit were strident. "Best Buy gave consumers the worst deal - a bait-and-switch-plus scheme luring consumers into stores with promised online discounts, only to charge higher in-store prices, he said. The state has reportedly been gathering multiple consumer complaints from shoppers who say they visited Best Buy, but were told that the items set aside for the sales price were gone.
Labels: Best Buy, Blumenthal, Microsoft
