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Product registration: A gold mine for marketers

Open the box and wrestle that new DVD player out of the Styrofoam and the plastic bag. More than likely, a product registration or warranty card will come tumbling out, too.

If you're like many consumers, you'll then fill the card out and mail it in to ensure your warranty in case the machine breaks. Sounds innocent enough, but it could be a bad move if you want to protect your personal information, and possibly your safety.

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Product registration and warranty cards don't do very much for the consumer, but they are a gold mine for marketing companies. Notice that many cards go way beyond asking for your name, address and the serial number of the product. Questions such as your age, marital status, salary, education, do you own or rent and what kind of car you drive are common.

Chris Hoofnagle, deputy counsel with the Electronic Privacy Information Center in Washington, D.C., says product warranty cards that collect personal information are deceptive.

"Product warranty cards are information collected under the pretense of a benefit where the information goes straight to marketers. The purpose of a product warranty card is not to protect you, it's to collect marketing information."

Registration vs. warranty
Some consumer experts differentiate between registration cards and warranty cards. Registration cards, at least in a perfect world, ask for just enough information so the company can notify you if the product is recalled. Warranty cards have developed more of a reputation for asking a laundry list of questions about your personal habits. But that difference is getting blurred as many registration cards are data mining, too.

Do you have to return the cards to activate your warranty? Sometimes.

"If the product comes with a full warranty, the manufacturer cannot require you to return the registration card," says Jean Fox of Consumer Federation of America.

But if it's a limited warranty, as is the case most often, says Fox, then the manufacturer may require you to return the card.

"As long as it's stated as a condition in the warranty. If they require you to prove the date of purchase, they have to state that in the warranty. But you don't have to tell them how many children you have."

Fox is citing consumer law, but some privacy advocates are staunchly against returning the cards under any circumstances.

"They can call them product warranty cards or product registration cards or green leafy vegetable cards. The people who don't send them back are in the know. The ones who do send them back are the biggest and best targets for marketing. They're the ones who have their personal information sold without their knowledge or permission," says Bob Blumash, creator of Illinois-based Private Citizen.

Name, address, serial number only
All privacy experts we talked with say that if you feel obligated to return the card, only include your name, address, the product serial number and a copy of the receipt if you need to verify the date of purchase.

If you don't return the card, keep it with the receipt.

What's the big deal about revealing how many kids you have or what car you drive? Marketing companies can build a large database on you as an individual and, at best, you'll be deluged with telemarketing calls and junk mail.

"You'd be surprised at how much information they can put together from a consumer survey," says Washington, D.C.-based attorney Michael Lenett.

"It's very detailed and can be cross-referenced in many ways. Direct marketing companies can glean an awful lot of information about you based on your responses to simple questions."

Dangerous liaisons
Lenett has seen the ugly, chilling side of consumer surveys. He represented Beverly Dennis, an Ohio woman who filled out a survey card that promised coupons and product samples in return for answers to innocuous questions about what bath soap and shampoo she used.

Dennis got more than coupons and tiny bottles of shampoo. She soon received a lengthy, sexually explicit letter from a man who knew too much about her. He knew her birthday, her salary, the soap she used, the magazines she read and, obviously, where she lived.

It took more than a year, but through dogged determination, Dennis eventually found out how the man knew so much about her. Metromail Corporation, the company that ran the survey, delivered thousands of the cards to a Texas prison where inmates sifted through and processed the data.

The inmate who wrote to Dennis was a convicted rapist and burglar.

Dennis sued Metromail in what turned out to be a class action lawsuit. During litigation, her attorney found that Metromail had compiled a 25-page file of personal information on Dennis.

Lenett, her attorney, says the Metromail case was a matter of deception and disclosure.

"She gave her personal information willingly, but for what? To get coupons and product samples. She never consented to have her information be put into a database where consumer portfolios would be assembled and sold to any willing buyer. And she didn't consent to allow her information to be seen by felons."

Dennis won her case and a $15 million settlement fund was created. Metromail also had to agree to stop using inmates to process information.

But that doesn't stop other companies from using inmates to process sensitive data.

The phone chain gang
"The old image of prisoners making license plates has changed to prisoners doing computer data entry and telemarketing. Prisons have turned from a manufacturing center to a data processing center," says Blumash.

The Utah Department of Corrections points out on its Web site that, "Every day, the Utah Correctional Industries Data Entry Operation trains inmates to transcribe handwritten or typed information from state forms into a format that can be read by a computer program. The bulk of the work done is on Medicare claims for the Department of Health."

Medicare information is probably a bit more sensitive than your favorite soap.

The National Correctional Industries Association, which puts inmates to work for various job assignments, didn't return calls for comment.

No doubt many inmates who qualify for job training are hoping to get their lives back on track, but employing convicted felons to process personal information is a questionable practice at best. In 2000, Kentucky, for example, stopped accepting such work for its inmates because of privacy concerns.

Restricting registration
Perhaps the trickiest aspect about not returning warranty or registration cards is how will you be notified if there's a recall?

The Consumer Product Safety Commission, which regulates 15,000 products and issues about 300 recalls a year, is aware of the warranty-card controversy and is exploring ways to improve the recall process.

"The consumer advocacy groups would like to see registration cards where the privacy of the individual is protected and it doesn't become a marketing tool; it's a consumer safety tool," says Bruce Richardson, director of public affairs for the CPSC.

"There's a general belief that if people knew the registration card would be used strictly for a safety recall it would have more impact than a warranty card. Registration cards need to be something separate, exclusive of any other materials that the manufacturer may be asking of the consumer."

Rep. Jim Moran, D-Va., has re-introduced legislation that would require companies to provide postage-paid product registration cards that only ask for a consumer's name, address and phone number.

The Direct Marketing Association declined an opportunity to comment for this report.


-- Posted: April 21, 2003




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