California is investigating some businesses operating loyalty programs in the state and notices have been sent out alleging they aren’t complying with consumer laws.
Businesses that offer financial incentives, such as discounts, free items, or other rewards, in exchange for personal information in California are required to provide consumers with a notice of financial incentive. The notice needs to describe the terms of the program to consumers before they opt into it.
The letters were sent in late January on Data Privacy Day to major corporations in the retail, home improvement, travel, and food services industries, who have 30 days to fix the problems.
“In the digital age, it’s easy to forget that our data isn’t only collected when we go online,” said California Attorney General Rob Bonta. “It’s collected when we enter our phone number for a discount at the supermarket; when we use rewards for a free coffee at our local coffee shop; and when we earn points to purchase items at our favorite clothing store.”
Bonta called the enforcement action “sweeping.”
On July 1, 2020, the California Department of Justice began enforcing the California Consumer Privacy Act or CCPA by notifying businesses not following the law of problems that needed to be corrected.
In July 2021, the attorney general provided an update on the first year of CCPA enforcement and urged more Californians to take advantage of their new rights. Bonta’s office also launched an online tool that allows consumers to directly notify businesses of potential violations.
To report a violation of the CCPA, consumers can submit a complaint online at www.oag.ca.gov/report.
Colorado and Virginia also have enacted comprehensive consumer data privacy laws similar to California’s.
