Friday, 17 October 2014

E-commerce portals could be using customer information to their disadvantage

With e-commerce portals trying hard to outdo one another by announcing dirt cheap deals to lure customers to their websites, cyber security analysts here claim that they could breaching the code of ethical business practice. In the absence of any defined regulatory body to standardize business practices for e-commerce portals, consumers increasingly run the risk of getting duped.

According to experts at the Cyber Security and Privacy Foundation (CSPF), most ecommerce websites including a few popular ones have an inbuilt algorithm to jack up the prices of products depending on the search history of the user.

“When a user logs into an ecommerce portal for the first time and searches for a product, his personal information as well has his shopping preference is recorded. When the same user repeatedly logs into the system searching for the same product, the system identifies his craving for the product and increases the price automatically. In such cases, the same product could be sold to different users at different prices at the same time, which is technically unethical,” says J. Prasanna of CSPF.

Even while searching for airline tickets and tour packages, the portals record the purchase patterns and price their products accordingly. With Big Data Analytics (the practice of studying of stored web data to understand consumer usage patterns) offered by various companies, ecommerce portals are even able to share information regarding their users to other portals. In effect, while one might be just browsing websites for the best deal on a product, the system might actually be working against him and get him the worst deal, say cyber security consultants here.

Another major issue with ecommerce portals that has been recognized globally is that out of stock products are marked on sale. When a user purchases the product and submits his credit or debit card information, the money gets deducted after which the product is listed as gone ‘out of stock’.

“It takes anywhere between a week to four weeks for the money to be credited back to your account. If a billion users are using their credit card for an out of stock product, that is a few billion dollars at the disposal of the firm for a month,” says S. Vijay Kumar, an independent cyber analyst here.

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