Class Action Lawsuit Claims Apple Sells Customer Data

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Apple is facing a new Class Action lawsuit over allegations that its collects and then sells personal information without consent. The case was filed in Massachusetts District Court in Boston by Adam Christensen, Jeffrey Scolnick, and William Farrell who claim Apple forces customers to provide their Zip code as to complete in store purchases and then sells the information it collects to third-party companies.

Apple faces class action lawsuit for collecting and selling personal informationApple faces class action lawsuit for collecting and selling personal information

According to the Class Action lawsuit, Apple's policy violates Massachusetts laws prohibiting companies from requiring customers to divulge personal information when making credit card transactions. The information Apple is collecting isn't required by credit card companies, they argue, therefore the policy can't be enforced in the state.

The personal information Apple is collecting, they claim, is then sold to other companies without any compensation to customers. Under Massachusetts law, collecting personal data that's not required by credit card companies, and then providing that information to other parties, constitutes unfair and deceptive trade practices.

Whether or not Apple collects personal information during transactions isn't at question; it's how the company tracks our purchases and makes later purchases an easier process because receipts can be emailed without reentering addresses. The convenience factor enhances customer service, although in this case the plaintiffs clearly aren't comfortable with the practice.

Apple doesn't require customers to pay with credit cards, although the company does make that the most convenient method for completing transactions. All Apple Stores accept cash, too, and personally identifying information isn't required.

Whether or not Apple is actually selling customer information to third parties isn't quite so clear cut. The company collects customer data to track purchases and make future transactions easier, but its policies only say that it can share some information, not that it does.

The plaintiffs have asked for monetary damages as well as an injunction to stop Apple from requiring personal information during credit card transactions, as well as legal expenses. Apple hasn't commented on the lawsuit.

[Thanks to Patently Apple for the heads up]

[Some image elements courtesy Shutterstock]

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13 Comments Leave Your Own

Lee Dronick

  The plaintiffs have asked for monetary damages

Do they have to prove that they were damaged by the collection of Zip Codes?

GraphicMac

This is ridiculous. How is anyone ‘damaged’ by this? Every company sells basic sales information.

jhorvatic

Buying in an Apple store, Apple asks for your first and last name and your email if you want your receipt emailed to you. Otherwise they will print a receipt. No Zip code required.
Credit card companies, and carriers require your zip code to complete transactions for buying an iPhone. I think they are confused as to who is requiring what information. I don’t think you can buy a cell phone without putting in your zip code anywhere not just Apple Stores. You buy a car with credit they ask for your zip code. You buy a house they ask for your zip code.
This suit seems to grab at nothing about nothing and I seriously doubt they will get anything out of it unless Denise Coyote is the judge.(smirk).

gnasher729

GraphicMac: If you are trying to defend Apple, then your post is pretty lame. I would be pretty upset and annoyed and would tell everyone to stay away from Apple if they sold my customer information, as you claim “everyone does”. On the other hand, I’d be very, very surprised indeed if they did. They’d lose 100 times more from angry ex-customers than they would make from selling my information.

All that said, I don’t see Apple requiring me to give personal information _when making credit card transactions_. They have the address belonging to my AppleID (which they used for example in the in-app purchase settlement to notify people who couldn’t be reached by email). I don’t know if I was _required_ to enter it, but it was independent of whether I’m using a credit card or not.

mjtomlin

This is a ridiculous lawsuit… I’ve had many retailers ask for my zip code. This isn’t done for collecting and selling personal information, it’s used to determine where the best location might be for you to possibly open another store to better serve your customers needs. Any information that is shared is completely anonymous and usually handed over to a consulting company that does the actual location scouting. There is NO other reason for this. By the way, credit card companies do sometimes require the billing zip code to be entered as a security measure.

I’ve also had retailers ask for my email address and phone number, etc. None of this is EVER required, of course.

geoduck

The point is not the collecting, it’s the selling. The plaintiffs will have to prove that Apple sold customer data and not, for example MasterCard that you have tied to your AppleID, or Belkin when you registered the router you bought through the AppleStore. . That’s going to be difficult to do.

vpndev

Various credit card companies have different rules, and sometimes they also vary by store and type of transaction.

For example, it’s commonplace for gas stations to require zip code for credit card purchases. I have no idea whether the station captures and/or retains the zip.

On the other hand, stores such as Sears often pressure you for a phone number and/or address. I’m pushing back on that.

vpndev

gnasher - I am not sure that graphic was trying to defend Apple. He was just pointing out that most companies sell, as he put it, “basic sales information”.

If it’s anonymized then I think it’s not an issue (then again, I am not a lawyer).

This could just be Apple collecting data for its own use, such as where to locate new stores. If I were Apple then I’d certainly want to collect that for internal use.

Lee Dronick

  On the other hand, stores such as Sears often pressure you for a phone
number and/or address. I’m pushing back

555-1212 and 1060 West Addison smile

Stores use the Zip Code to find from where comes their customers and then they can target advertising to that neigborhood. The 5 digit Zip Code doesn’t narrow a person’s mailing and street address, though it could be combined with data to do that. Zip+4 does narrow things down

CudaBoy

Well isn’t this special? I hope this is a BIG GLASS of SHUT UP JUICE to all the drones out there that were trashing Google and will “abandon” Nest (as if they ever heard of Nest). At least Google wasn’t hacked like Apple was recently.
Can we now all agree that there is NO PRIVACY on the web?? Say it-forget it, Write it (or post it)- regret it.

jscottk

There’s nothing nefarious going on here.

In my own little company, we have three different discount rates as per our agreement with VISA/MasterCard; all expressly related to security:
Cheapest Rate: Direct swipe of credit card through machine at time of purchase.
Slightly Higher Rate: Key in credit card number and expiration date, as well as CVVS code, street address number, and zip code.
Highest Rate: Key in credit card number and expiration date only.

So, let me get this straight. These people want their credit card transactions to be LESS secure?!?

MuppetGate

@Cudaboy

Er … they haven’t won the case yet.

gnasher729

vpndev, someone claimed that this lawsuit was ridiculous because “every company sells basic sales information”. Clearly that looks like defending Apple, and clearly achieves the exact opposite. This is like a man being accused of beating his wife, and someone says “that’s ridiculous, everyone does it”. A defense which, intentional or not, achieves the exact opposite.

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