As I See It: Behavioral Redlining
October 30, 2006 Victor Rozek
“We’d like to know a little bit about you for our files; we’d like to help you learn to help yourself.”
–Simon and Garfunkel
Ever since people began gathering information about each other, the gatherers have used the data to control and punish the gatherees. King Herod, for example, used census data to hunt down families with infants hoping to preempt the coming of Christ by killing all of the male babies in Bethlehem. For centuries thereafter, birth records were used to determine social status–noble or commoner, free or slave, tax beneficiary or tax payer-and to keep common folks firmly in their place.
In India, where the ancient caste system persists well into the third decade of globalization, whether you are a privileged Brahman or a scorned untouchable is largely a matter of chance, but also a matter of record.
Control and punishment were pretty much the normative uses for personal information, but that began to change in 1704. That year, an event occurred that has had as profound an effect on the course of this nation as the heavy lifting performed by the Founding Fathers seven decades later. That was the year the first advertisement appeared in a Boston newspaper. Some rich guy was looking for a buyer for his Long Island mansion, and the bold flaunting of his asset was the humble birth of the advertising industry. And while the Founding Fathers are becoming less and less relevant as our freedoms evaporate, advertising is flourishing, thank you. Heaven knows how many commercials we see and hear each day, probably hundreds, for which we can be truly thankful.
But advertising was sort of a hit-and-miss proposition until computers came along. Deface the landscape with a billboard here, place an ad in a magazine there, but who knows if anyone is paying attention. The ability to gather and analyze large amounts of data, spawned much more directed advertising, which is now morphing into personalized advertising. Of course, to be the object of a personalized ad, the advertisers must know a great deal about you. Given our history, that’s potentially troubling, but at least there was finally something in it for the little guy.
Walk into a grocery store and in exchange for delusory discounts you will be asked to present a “membership” card that tracks your purchases, updates inventory levels, and alerts buyers and/or suppliers when stock items need to be replenished. It’s a nice example of the integration of service providers, suppliers, and customers. OK, so you’re not really getting much in the way of discounts, but if you didn’t have the card you’d get gouged. So, the market gets to track what you buy and in return you get a little off on coffee filters and organic butter. It’s not so good for vegetarians because there are no blowout sales on broccoli, but if you eat cookies or use laundry soap, there’s hope.
It should have served as a prophetic warning that the system was originally called “Behavior Scan,” but we were too busy eating discounted cookies to notice. It was designed to be integrated with the systems of cable television providers for the purpose of showing viewers customized commercials based on their purchasing history. Wow. I could watch a bunch of cookie commercials while eating my third bag of Oreos. Nice.
The idea caught on. Silk or cotton, Cartier or Timex, porno or Disney, scuba or skiing, paper or plastic; if you had a preference, someone was recording it. It seemed harmless enough, and slowly but surely, tracking our individual preferences became a national obsession.
In fact, business was capturing so much data, you might say it would take a warehouse to store it. That created huge IT problems, and just about the time IT managers were thinking of moving to Oregon to take advantage of physician-assisted suicide, some clever marketing guy called it “data warehousing” and, like junk transforming into valuable antiques, data was fashionable again. But, alas, soon even the warehouse filled up, and managers still didn’t know what to do with all that information, so some other guy came up with the idea of mining the warehouse. “Data mining” is a pretentious metaphor to be sure, having the built-in assumption that there is something valuable to unearth, but once again, it was cool to have mountains of data, somewhere in which my cookie preferences no doubt lies.
Well, data mining led to such esoteric things as correlation analysis, statistical arbitrage, pattern recognition, and a dozen other flavors of data manipulation. It was even said to have identified the 9/11 attack leader Mohamed Atta and three of his hijackers as possible members of al Qaeda operating in the United States–more than a year before the attack. A dreadful reminder that computers can’t do everything.
In any event, the little guy was doing OK. He was the center of attention and everyone wanted to know everything about him so they could encourage more of whatever purchasable behaviors they had already recorded. But the age-old propensity to punish and control dies hard.
Last week, I had to change insurance providers because the good-hands people at Allstate dropped earthquake protection from their home insurance policies. Insurers, it seems, love to take our money as long as there is little chance of something bad actually happening. So I met with an agent from another company and sat in his dingy office prepared to provide him with all the information he would require to feel safe enough to insure me.
But all he really needed was my name.
Once he typed my name into his computer, he began asking me to verify the information that popped up on his screen. He already knew my address, my telephone number, the approximate size of the house, and how far it was from the nearest fire station. I must have expressed surprise and annoyance at how much information he had about me, because just as he was about to verify my social security number (SSN), he stopped. Sensing my irritation he caught himself and asked for it instead saying that although the law allowed insurance companies to share customer data, it didn’t allow the transfer of SSNs. Nonetheless, given his momentary discomfort, I would have bet the house that he had my SSN as well.
Hell, he probably also knew my wife’s shoe size and the color of my favorite boxer shorts (the ones with the cute little Dr. Seuss characters, but that’s another story). More to the point: how could he not know? His desktop computer was, after all, an electronic tentacle attached to a vast, integrated, octopus of a system on which insurance companies share client data.
Of course, we little guys didn’t know our information wasn’t confidential. Nor did we know that the data we provided could be used against us. But history repeats itself. Insurance rates are now linked to credit rating, and SSNs are required to run credit checks on prospective clients. Those with poor credit are forced to pay higher rates which, if they are already struggling, will only exacerbate their plight. How long, I wondered, before health insurance providers want to know what I eat and quietly tap into supermarket databases to determine whether it is safe to insure me? How long before some genetic profiler discovers that I have a genetic propensity for Hagen Das?
Quick, hide the ice cream and the cookies.
Incidentally, last year IBM announced it would not use genetic profiling for hiring or determining health care benefits; a curious announcement since no one publicly admits to using genetic profiling. Apparently, IBM knows or suspects that DNA samples are being collected, probably without our knowledge or permission, and will shortly be used as tools of discrimination.
Hey, I can’t help it–it’s genetic.
The problem is, there is too much information out there and it exists without context, so its full meaning can only be extrapolated, but everyone is acting as if it’s true. Why should we care? The answer varies depending on which side of the computer screen we sit. Service providers, business owners, and their employees should care because their creativity and intuition is being buried under mountains of computer data. In larger businesses, policies are dictated by conclusions reached by computers. Thus, machines regularly override any possibility of following our inner wisdom and diminish the value of personal relationships. If, for example, my insurance agent’s computer had rejected my application, he had absolutely no personal power to override its dictates. He may believe he is the master, and his computer is but a tool, but in reality he is wholly controlled by the machine; following instructions on an input screen, exercising no more intelligence or creativity than someone painting by numbers. If I were him, I’d be depressed and probably eat some cookies.
Clients and customers should care because information without context is flawed and potentially damaging. And increasingly, it is being used as evidence against us without our knowledge or ability to rebut. We won’t be told our health care policy has been cancelled because some computer tagged us as a donut freak; or that our house insurance won’t be renewed because our credit rating matches our IQ. As consumers we will find ourselves in crazy-making situations where one commercial enterprise is besieging us with marketing based on our preferences, while another is punishing us for exercising those preferences.
The result of massive data gathering efforts will be a form of behavioral redlining. Redlining is the practice of denying or increasing the cost of services based on race, religion, gender, family size, disability, or ethnic origin. In those forms, it is illegal. But behavioral redlining is not, and data collection provides the foundation for a nosy new world in which all activity is recorded, and business transactions are reduced to computerized evaluations of risk and reward.
The solution is to only buy cookies while wearing Groucho glasses, use cash wherever possible, and never give blood samples to strangers. It is estimated that each person’s computerized records are accessed or updated 35 time each day. By whom, for what purpose, and what conclusions are being drawn about us is often unclear. But one thing is certain: whatever picture emerges, it will be an inadequate representation of the real thing. Our imaginations, our dreams, our hopes, our essence will not be represented.
Nor will my good intention to diet in the morning.