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California and the West

Senate OKs Measure on Customer Data

Privacy: Bill would prohibit stores from selling information about club card members to other businesses.

April 27, 1999|CARL INGRAM | TIMES STAFF WRITER

SACRAMENTO — The state Senate voted Monday to make it illegal for supermarkets to sell personal information about the buying habits of discount card club members without the customers' consent.

Sen. Debra Bowen (D-Marina del Rey) said major grocery chains are amassing vast databases on their customers, which can be used not only for their own legitimate purposes but also sold to other businesses and marketers as well.

"Unfortunately, club cards require people to choose between maintaining their privacy and saving money on their weekly grocery bill," she told the Senate.

The bill was approved by a 22-12 vote and sent to the Assembly, where it is expected to get a favorable reception. Bowen said Gov. Gray Davis has not taken a position on her measure, SB 417.

The legislation would require stores to receive their customers' approval before selling or sharing information about them with outside entrepreneurs. Violators would be subject to a misdemeanor violation and a $500 fine.

In addition, discount card applicants could prohibit supermarkets from linking them by name to their purchases.

Credit card holders have long enjoyed such privacy safeguards. The Bowen bill would allow supermarkets to continue compiling electronic records for their own business uses.

Dave Heylen, spokesman for the California Grocers Assn., said major supermarket chains keep their customer information confidential and do not sell it.

"We take the responsibility of keeping this information secure very seriously," Heylen said. He said it would be foolish to anger customers by disclosing their private buying habits.

Bowen said applicants to the popular discount card programs, which reward a store's most loyal customers, must disclose private information such as their driver's license, Social Security number and their home telephone.

She said she is concerned about possible misuse of information based on purchasing habits.

"What would happen if a health insurance company decided it simply was not going to write health insurance for anyone who has a record of buying more than a certain amount of red meat or dairy products?" she asked.

But opponents assailed the bill, including Sen. Bill Morrow (R-Oceanside), who criticized it as an unnecessary intrusion by the "heavy hand of government."

"If you've got a problem with the supermarkets doing this, take it up with the supermarket people or don't give them your business," he said.

Republican floor leader Ross Johnson of Irvine said it was simply a matter of a customer giving up a claim to privacy in exchange for a discount.

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