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April 24, 2015

Secret customer tracking results in slapped wrist

US firm Nomi failed to notify customers of tracking according to the FTC.

By James Nunns

Nomi Technologies has reached a settlement with the US FTC regarding its tracking of retail store customers.

The complaint had been filed that the company did not notify customers of the tracking, or allow them to turn it off. It was claimed that it had not lived up to its privacy policy which stated that an opt-out mechanism would be available.

This, according to the Federal Trade Commission, implied that notification would be given to customers, which it did not do.
The agency stated that Nomi collected information from around 9 million mobile devices for the first nine months of 2013.

Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said: "It’s vital that companies keep their privacy promises to consumers when working with emerging technologies, just as it is in any other context."

"If you tell a consumer that they will have choices about their privacy, you should make sure all of those choices are actually available to them."

The tracking of customers is one that is being use more frequently by retail stores as they look to optimise store layouts and product placement.

Although Nomi has escaped a fine, this case will act as a warning to others in this industry to be careful with the wording of privacy policies and making sure they are fully implemented.

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Nomi stated: "We continually review our privacy policies to ensure that they follow best practices and had already made the recommended changes in pursuit of that goal by updating our privacy policy over a year and a half ago, while we were still an early-stage startup that was less than a year old."

The information that Nomi collected includes the MAC addresses of store customers’ mobile devices, this information is hashed before storage.

According to the FTC complain, Nomi also tracked consumers outside of the store and collected data on device type, date, time andother information.

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