Secret Consumer Score Determines How Companies Treat You

SALT LAKE CITY, Utah – If you have ever owned a smartphone, shopped online, bought an airline ticket or used a credit card, you are being secretly scored in ways that can impact your wallet. The scorers are businesses we buy products and services from every day.

They are called Customer Lifetime Value or CLV scores. All sorts of retailers and businesses use them to judge our value as consumers.

“They have detailed information on every single transaction,” said Andrea Thomas, a marketing professor at the University of Utah.

“They have algorithms that show how people like you have acted in the long term. So, then they can assign a customer lifetime value score to you individually and then act on that,” she said.

The scores can determine what products and ads we see online, the prices we pay, even how long we are put on hold when we call customer service. And the best treatment goes to those with the best scores.

“People with a certain CLV score will get popped to the top if you’re calling. You’ll be the next call we answer. Or, we look at you and say, ‘Ok, we’re actually going to give you a deeper discount or more flexible terms because of the value that you are as a consumer,’” Thomas said.

While CLV scores are specific to each company, here is how they work in general: Retailers link transactions to individuals, add a dash of demographics like age, marital status and zip codes, then pepper in some proprietary algorithm and voila – a score to measure our reputations.

“They can tell whether you are being too expensive for them,” Thomas said. “Whether it’s fraudulent or not, you start to get a reputation as a consumer, as being somebody that isn’t worth the customer service hassle.”

If you shop often without being enticed by deals, your CLV score is probably higher. But, if you complain often, buy things only when they’re deeply discounted or return items often, your score probably stinks. We say probably because most businesses will not tell you what your score is.

“It’s not your right as a consumer right now,” Thomas said. “Nobody has legislated that it’s your right to see it and to have input into it like they have other scores like your credit score.”

That did not sit well some of the consumers we spoke to on the street.

“It’s maddening,” said Laurie Hewitt. “It’s not a fair shake, really. I mean, we’re doing them a favor.”

Vicki Smoot expressed a similar sentiment. “If they’re tracking us and taking data on us, then we should be able to ask for our score,” she said.

“That’s something that you should be able to check up on and see how you are doing,” said Chase Laser.

Privacy advocates said the same thing. Some compare the use of CLV scores to China’s developing social credit system that scores people’s reputations on their good and bad deeds.

Bad deeds like walking your dog without a leash, littering, bad driving or even gossiping will bring down your social credit in China. If it drops too low, forget about dining at the best places, landing the best jobs – even buying airline or train tickets may be out of reach.

A key difference is that China’s social credit system is government-run and people know where they stand – good or bad. In America, consumers are tracked and scored by private companies who don’t share that score.

Uber is a rare exception. A passenger’s score is visible right in the rideshare company’s app.

Driver Marlea McKinstry has given over 7,000 rides. She showed us how Uber’s scoring system works.

“I very seldom give out less than a five (star),” McKinstry said. “You just have to be somewhat considerate.”

Translation: be polite, don’t leave trash behind and being ready to go at pickup time.

“The driver doesn’t begin to get paid until you get in the car and they start the ride,” said McKinstry.

Drivers rate riders from one star on up to five. If your average score falls below four stars, McKinstry said you can get the boot.

“They’re deactivated and they can’t ride anymore,” she said.

“I’d been using Uber for months before I realized, just like I was rating the drivers, the drivers were rating me as a rider. And, I have to say, I was shocked when I found that out,” said Ed Carter, director of Brigham Young University’s Communications Department.

Carter researches and writes about digital privacy. He is worried that since most companies will not let us see our CLV scores, there is no mechanism to ensure their decision making in how to treat us as consumers is fair.

“I think that is scary because a lot of these decisions actually do affect our lives in real ways,” Carter said.

He was also troubled by the lack of oversight as companies keep tucking permission to use our personal data this way in user agreements no one reads.

“In this case, there is no guarantee of due process as far as our data and companies are doing with that,” Carter said.

Privacy advocates like Carter are urging the government to step in with stronger protections on how companies use our data. But given the huge growth in both e-commerce and data collection, expect the use of CLV scores to keep growing.