Your phone is sharing your secrets

Companies are placing sensors around town to track shoppers as they move. The sensors use phone location data to spell out your daily life.

By MSN Money Partner Jan 14, 2014 3:28PM
Businessman in car with smartphone © Image Source, Image Source, Getty ImagesBy Elizabeth Dwoskin, The Wall Street Journal

Fan Zhang, the owner of Happy Child, a trendy Asian restaurant in downtown Toronto, knows that 170 of his customers went clubbing in November. He knows that 250 went to the gym that month, and that 216 came in from Yorkville, an upscale neighborhood.

And he gleans this information without his customers' knowledge, or ever asking them a single question.

Zhang is a client of Turnstyle Solutions Inc., a year-old local company that has placed sensors in about 200 businesses within a 0.7-mile radius in downtown Toronto to track shoppers as they move in the city.

The sensors, each about the size of a deck of cards, follow signals emitted from Wi-Fi-enabled smartphones. That allows them to create portraits of roughly 2 million people's habits as they have gone about their daily lives, traveling from yoga studios to restaurants, to coffee shops, sports stadiums, hotels, and nightclubs.

"Instead of offering a general promotion that may or may not hit a nerve, we can promote specifically to the customer's taste," says Zhang. He recently emblazoned workout tank-tops with his restaurant's logo, based on the data about his customers' gym visits.

Turnstyle is at the forefront of a movement to track consumers who are continuously broadcasting their location from phones. Other startups, such as San Francisco-based Euclid Analytics Inc., use sensors to analyze foot-traffic patterns, largely within an individual retailer's properties, to glean insight about customer behavior.

Their success speaks to the growing value of location data. Verizon Wireless last year began crunching its own location information from customers to help retailers see which neighborhoods shoppers arrived from or limited information about their habits, such as restaurants they drive past. Apple (AAPL) recently released its iBeacon technology, which can be integrated into sensors to read customer's smartphone signals in brick-and-mortar stores.

But Turnstyle is among the few that have begun using the technology more broadly to follow people where they live, work and shop. The company's dense network of sensors can track any phone that has Wi-Fi turned on, enabling the company to build profiles of consumers lifestyles.

Turnstyle's weekly reports to clients use aggregate numbers and don't include people's names. But the company does collect the names, ages, genders, and social media profiles of some people who log in with Facebook (FB) to a free Wi-Fi service that Turnstyle runs at local restaurants and coffee shops, including Happy Child. It uses that information, along with the wider foot traffic data, to come up dozens lifestyle categories, including yoga-goers, people who like theater, and hipsters.

A business that knows which sports team is most favored by its clients could offer special promotions on game days, says Turnstyle's 27-year-old founder Chris Gilpin. Czehoski, a local restaurant, hired an '80s-music DJ for Friday nights after learning from Turnstyle that more than 60% of the restaurant's Wi-Fi-enabled customers were over 30.

But as the industry grows in prominence, location trackers are bound to ignite privacy concerns. A company could, for example, track people's visits to specialist doctors or hospitals and sell that data to marketers.

"Locations have meanings," says Eloise Gratton, a privacy lawyer. Marketers can infer that a person has a certain disease from their Internet searches. A geolocation company can actually see the person visiting the doctor, "making the inference that the individual has this disease probably even more accurate," she says.

Glipin says his data doesn't include doctors visits or sensitive health information, nor does he sell his profile data to marketers. He is considering offering more detailed profiles based on the logged-in information, an endeavor that would be legal in Canada as long as consumers provided consent.

"We know there is more value to be extracted from this data," Gilpin says. "But we're wanting to move cautiously and turn on the tap slowly -- in a way that doesn't offend customers."

In the U.S., companies don't have to get a consent before collecting and sharing most personal information, including their location. A bill, proposed by Minnesota Senator Al Franken, would require consent before collecting location data. 

The U.S. Federal Trade Commission settled its first location privacy case in December, against an app developer that misled consumers into believing their location data wouldn't be sold to marketers.

Some customers have concerns. Aj Tin, a university student and customer at Rsquared Café, was surprised to learn that by logging into the Wi-Fi at the coffee shop, he was enabling Turnstyle to track his movements and offer other local businesses an aggregated profile of his activities. The disclosure form tells consumers they will be tracked, but not how aggregated personal information will be distributed. "Privacy is cheap," Tin said.

Even as they covet the data, stores and businesses recognize it is a touchy subject. "It would probably be better not to use this tracking system at all if we had to let people know about it," says Glenna Weddle, the owner of Rac Boutique, a women's clothing store that is a Turnstyle client. "It's not invasive. It might raise alarms for no reason."

Viasense Inc., another Toronto startup, is building detailed dossiers of people's lifestyles by merging location data with those from other sources, including marketing firms. The company follows between 3 million and 6 million devices each day in a 400-kilometer radius surrounding Toronto. It buys bulk phone-signal data from Canada's national cellphone carriers. Viasense's algorithms then break those users into lifestyle categories based on their daily travels, which it says it can track down to the square meter.

For example, by monitoring how many times a consumer visits a golf course in a month, Viasense can classify her as a casual, intermediate or heavy golfer. People whose cellphones move at a certain clip across city parks between 5:30 and 8:30 every morning are flagged by the algorithm as "early morning joggers." The company identifies "youth" by looking at phone signals coming from schools during school hours and nightclubs, and home locations by targeting the places phones spend each night.

Viasense, which says its clients are grocery chains, a large concert venue and a billboard company, then overlays that data with census and marketing lists the company buys from data brokers to deduce demographic information, like whether the cellphone's owner is in a high-income bracket.

Viasense doesn't gather personal information or know any of its users' names, but CEO Mossab Basir says it is simple to figure this out. A person who has enabled location services on an app in which they upload information publicly, such as Twitter (TWTR), is broadcasting their location and their identity -- or at least their handle -- at the same time.

"People are probably unaware of how much they are making available," says Basir. "That's why it's a very delicate subject for us. It's kind of Big Brotheresque."

A username is considered personal information, which under Canadian law can't be collected without the consent of the user. In most of the U.S., consent wouldn't be required.

Right now, the only way to opt-out of geolocation is to either switch off the Wi-Fi on a cellphone, or make a request through a website of one the data companies like Turnstyle that has an opt-out option.

As these companies operate mostly behind the scenes, the nascent industry is keeping a close watch on Google (GOOG) and Apple. With their Android and iOS mobile operating systems, respectively, Google and Apple know the location of every customer's Wi-Fi-enabled phone -- far more location data than any startup could access. The Silicon Valley giants aren't allowing access to such data by outsiders. Both Google and Apple declined to comment.

Places were people didn't think they were being watched are now repositories for collecting information, says Ryan Calo, assistant professor at the University of Washington School of Law. "Companies are increasingly able to connect between our online and offline lives," he says.

More from The Wall Street Journal

Jan 14, 2014 4:18PM

This is horrible. I do not want to be tracked by anyone. Why would people stoop so low? This is taking our rights away. It should be illegal for businesses to track customers or anyone else. I already do not trust online businesses tracing what I am looking for. Just because I am looking does not mean I will be buying from anyone. I try to buy in my own area in real stores. If I can't find what I am looking for, I probably didn't need it anyway. Maybe it is good I don't have cell phone.

This has just made the list on my pet peeve list.

Jan 14, 2014 4:31PM
I hate the thought of everyone knowing what I do, where I go, and ANY of my private business.   I don't have anything to hide but I treasure my privacy and am somewhat of a hermit and don't like to share my business with anyone.   This is really LOW!!    There really should be a way to file charges against anyone or any business who is tracking our comings and goings.    Hate, hate this.
Jan 14, 2014 4:48PM
It is just going to get worse.  Soon you won't be able to take a crap without someone timing how long you spent in the John.
Jan 14, 2014 4:27PM
Solution:  Boycott Happy Child Restaurant in Toronto, Canada and all other businesses that use the Turnstyle Solutions spy grid.   Either that or don't take your cell phone everywhere you go.
Jan 14, 2014 5:42PM
WTF is going on? And people are okay with this?
Another reason I have a 19.95 cheap cell phone.... Wi Fi is turned off unless I turn it on....

Used to have a wifi enabled blackberry for work and every time you go to homey it would get barraged with wifi hits.... I would purposely walk around the store in odd patterns and pick up stuff then put it back knowing the cameras were following me.

Jan 14, 2014 9:22PM
As far as I'm concerned, this is just plain stalking and there should be a law against it.  It's getting so you can't scratch your a$$ without somebody knowing about it.  I grew up in the 60s when there as privacy and life was more relaxed.  I never spent hours doing paperwork like i do now.  My credit reports are pure fiction and I have spent many an hour trying to straighten out that mess.  I don't really like doing business or buying over the net knowing someone out there knows exactly what I'm doing.  After what happened to Target customers, I'm fearful of using my credit card.  Ah, the age of technology.  I didn't used to have to worry about privacy or my credit card info being stolen.  What a crock.  Now I have to worry about using my phone.  I heard even your printer can track you - what the he!!??
Jan 14, 2014 4:42PM

This reminds me that every time we go to a doctor, we have to fill out another "privacy" statement.   It is said we don't have to give our SS number!  Yet, the SS admininstration has all our information! The government has it!  They can and do give it out.  I was told by a dumb gal at the Utah Insurance Agency (not sure  hte exact name, but the state office) that it was "perfectly legal" for inusrance compnanies to pester me about buying insurance!!! What good is a state insurance office? They can tell you if one is "registered" to sell insurance in that state but  they offered no help at all to get the clowns to stop pestering me.  The DNC list is crap!  We are bugged constanly with "ask your doctor" ads!  The country is gone! AMEN!!! We all need to fly naked and live in glass houses never wearing clothes.

Jan 14, 2014 7:51PM
I think unless they have a written statement from you releasing your information TOO THEM, they have NO RIGHT to your or my information.  I have nothing to hide, but I should be the one who says who should have my information, not the government.  This is just like taxes, we don't have a choice, they just do it.  I am an American, if you ask me I'll do just about anything - but, if you order me to do it, I will most likely become oppositional defiant in a heartbeat.  THAT MY FRIENDS IS WHAT "FREE-WILL" IS ALL ABOUT!!!

Jan 14, 2014 7:48PM
I love it!!  people addicted to those idiot phones and texting -- nah, never say this crap comin' (chuckle).  mine in usually turned off and in the car unless I am home since it's my only phone.

TWEET TWEET!!!!!!!  carry on knuckleheads.

Jan 14, 2014 9:46PM

Government's love this kind of technology. All they have to do is say, "for your safety" and the outrage dies out completely. I've come to the conclusion this is because history has made it PERFECTLY clear that only Governments can do no wrong.

Especially ours; it's a freaking godsend - bwahahahahaha

Jan 14, 2014 5:37PM
the ones being fooled are the advertisers...IE: when talking with a friend we disagreed on some facts so I looked them up on Google...keep in mind this was a friendly discussion about medical stuff...
NOW I get all kind of add's about something that has nothing to do with me. 
Jan 14, 2014 7:09PM
I leave my wifi and gps off unless I need them. They come on in a second when I need them. If they want to follow me, they're going to have to work a little harder. And I'm hoping that with all of the wifi/gps enabled phones out there, that I'm just not worth the bother.
Jan 14, 2014 7:42PM
Great for advertisers to bombard us with even more ads. But absolutely unacceptable in the real world. Unless there is a big sign on the door or a CLEAR notice on the phone when you use the free wifi, this should not be allowed at all. What right do you have to know I went to a club after eating at your restaurant? You shouldn't have the information even without my name.
Jan 14, 2014 8:33PM
Ahahahahahaha and Canadians keep saying their so much better then the U.S >.>
I said before and i"ll say it again the only thing difference between the two places is
its colder up north >.> Need to stop this tracking crap period.

Jan 15, 2014 2:16AM
As much as I detest carpetbagger lawyers, it sounds like it's time for some big class action lawsuits.
Jan 15, 2014 12:22AM
And now you know another of the reasons why I do not have and will never have any form of cell phone for at least as long as hard wired phone lines are available.  At least I can do that much to try against all odds to retain some of my privacy.  I know I can't block all intrusions but I try to do what I can.
Jan 14, 2014 11:43PM
our = your.  One other thing.  Get a wallet that allows you to shield your credit and debit cards.  These can also be scanned.  In fact just go back to flip phones and paper checks.
Jan 14, 2014 5:51PM
That's why I have a Windows Phone and always turn off Wi-Fi when not at home. I also turn off Location services when I feel I don't need that capability like I'm not traveling. A very good reason to understand what you're doing and not to have an Android mobile device.
Jan 14, 2014 5:10PM
Who cares that the speculative analysis of this type of secretly acquired data is most often quite flawed -

"..."Locations have meanings," says Eloise Gratton, a privacy lawyer. Marketers can infer that a person has a certain disease from their Internet searches. A geolocation company can actually see the person visiting the doctor, "making the inference that the individual has this disease probably even more accurate," she says..."

Or, the subject under digital surveillance might have been looking up information for a sick relative or friend whom they are also transporting to doctor visits...

But oh no, highly paid experts NEVER make mistakes like that while collecting and analyzing data... Once they've determined that it's YOU that they have diagnosed, it's you baby... YOU have the disease and your "personalized advertising experience" will reflect that probably forever.

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