Technology

Track-by-Phone Vendor Nomi Misled Consumers, FTC Says

The Federal Trade Commission building in Washington on Wednesday, Jan. 28, 2015. The nation's largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service. The FTC said that TracFone's advertising promised unlimited data, but the company then drastically slowed down consumers' data speeds, a practice known as throttling, when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers' data service when they ran over the limit. (AP Photo/Alex Brandon)
The Federal Trade Commission building in Washington on Wednesday, Jan. 28, 2015. (AP Photo/Alex Brandon)

 

(PYMNTS) – Customer-tracking vendor Nomi Technologies failed to give in-store customers an adequate chance to opt out of being tracked through their smartphones, according to a settlement announced on Thursday (April 23) with the U.S. Federal Trade Commission.

The FTC charged that Nomi’s privacy policy said it would give consumers who didn’t want to be tracked a way to opt out online and in-store. Instead, for nine months in 2013, Nomi provided no way of opting out in-store and didn’t tell customers — or other people who were tracked because they were just passing near a store — that they were being tracked at all, the FTC said. (Nomi did offer the online opt-out option on its website.)

New York-based Nomi was acquired by retail analytics company Brickstream last year. But in 2013 it was a startup with $3 million in funding that promised brick-and-mortar retailers it could let them track customers in-store as accurately as on a website, using the Wi-Fi signals from each customer’s smartphone.

Nomi’s problem wasn’t the tracking, but the fact that it didn’t follow its own privacy policy. That made the opt-out promises false and misleading, according to the FTC.

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