Canadians were reminded of their vulnerability as consumers last January when it was revealed that hackers had stolen reams of customer information, including credit-card numbers, from TJ Max Companies, the parent of retailers Winners and HomeSense.

Authorities believe the information may have been sought in order to steal people's identities and to enable criminals to use their credit-card numbers fraudulently.

But academics who spoke at a recent surveillance conference at Queen's University in Kingston, Ont., warned shoppers that bandits aren't the only ones interested in their personal information.

The data shoppers provide through customer-loyalty programs and over the counter to cashiers is of huge value to retailers and can change the way we are categorized as consumers, said Yolande Chan, a Queen's school of business professor. Chan is also an expert in information privacy and the social impacts of information systems.

Yolande Chan

"There's a lack of awareness in the Canadian public in general about the use of personal information by companies," said Chan, who recently helped with a Queen's study of the globalization of personal data.

She and PhD candidate Jason Pridmore warned at the Surveillance Awareness Week conference last month that consumers who take part in customer-loyalty programs or provide personal details to store staff when completing retail purchases are helping organizations to socially categorize them.

It's an action, they said, that can cause actual social disadvantages to people.

Chan said retailers use the shopping-habit information they collect on people through customer-loyalty cards and through other databases, such as the national census, to determine what advertising they send to consumers and to their neighbourhoods.

For retailers, it makes good business sense to advertise intelligently.

Chan should know. She is also the director of the Monieson Institute at Queen's, which helps organizations use their knowledge capital.

If someone buys a lot of junk food at their neighbourhood grocery store, a profile will be built on them that may indicate they are an unhealthy person and poor eater.

Meanwhile, another shopper may buy a lot of healthy food so they may have a profile that indicates they are fit and healthy, said Chan.

It may seem harmless enough that one person will then receive direct advertising at home for junk food while another will receive ads for health clubs.

However, Chan said, consumers may feel differently if they realized those same profiles could result in the one person receiving a stack of coupons for potato chips and chocolate while the other receives big discount offers for fitness club memberships.

"What we don't realize is that the information we provide might exclude us from certain services," she said.

At the same time, the profiles compiled on consumers for use by organizations are not accessible to the consumers. Also, they may or may not be correct, she said.

Not surprisingly, Chan never gives out her postal code or other personal details when asked to do so by a retailer.

If she's told it's required for the purchase, she demands to speak to a manager.

According to the Queen's study, which surveyed 1,000 Canadians and 1,000 Americans, 50 per cent of Canadians and 48 per cent of Americans believe corporations, such as credit-card companies and banks, won't safeguard their personal information.

At the same time, 59 per cent of Canadians and 44 per cent of Americans believe their personal data has never been sold for profit.

Chan said this naive belief shows the vulnerability of North American consumers.

On the plus side, Canadian legislation prevents most organizations from legally trading information collected from consumers, said Pridmore, who wrote his thesis on customer-loyalty programs.

It helps that the information is valuable enough that organizations are reluctant to trade it because they want to keep it for themselves, Pridmore said.

More legislation is pending that will make it harder to trade personal information.

Last month, the federal government introduced legislation that will make it illegal to collect personal documents that belong to others in order to commit fraud.

Pridmore's thesis explores how customer-loyalty programs "segment" consumers societally. It demonstrates that the data collected not only determine how organizations market to consumers, but also how consumers behave.

"Consumer purchasing is actually shaped by loyalty programs," he said.

For example, the person who receives a slew of coupons for junk food as a result of data collected through a store-loyalty program may feel encouraged to buy and eat that unhealthy food.

At the same time, the person who receives the big discount for their local fitness club may be encouraged to work out and be healthy.

Customer profiles can also be used to target neighbourhoods so that certain neighbourhoods and people receive certain types of advertising, he said.

Pridmore said he does not use all customer-loyalty programs, but when he does, he makes sure the reward is worth the trade-off of information.

For example, he knows that Amazon.ca tracks his buying habits, but it also informs him when books in which he might be interested are available.

Similarly, he enjoys the savings offered by his Chapters bookstore card, he said.

In another example of information being used to segment people, a bank customer may receive a lower interest rate on loans due to his or her consumer profile, which may or may not be correct.

In the U.K., telephone companies allow customers from more affluent areas to jump customer service centre phone queues.

Organized annually by sociology professor David Lyon, Surveillance Awareness Week is meant to spark discussion and awareness about the impact of surveillance on society. It often brings surveillance speakers from around the world to speak.

Lyon said people are generally aware that data is being collected on them, but they don't tend to know about the potential impact and how it can prejudice their life options.

"They they don't seem to be aware of ... how to deal with unwanted and inappropriate consumer surveillance," he added.

(Frank Armstrong can be reached at armstrong@businessedge.ca)