Businesses are required under CCPA to provide a notice of financial incentive if profiting from the collection of customers' personal information.
OAKLAND – California Attorney General Rob Bonta today announced an investigative sweep of a number of businesses operating loyalty programs in California and sent notices alleging noncompliance with the California Consumer Privacy Act (CCPA). Under the CCPA, businesses that offer financial incentives, such as discounts, free items, or other rewards, in exchange for personal information must provide consumers with a notice of financial incentive. This notice must clearly describe the material terms of the financial incentive program to the consumer before they opt into the program. Letters were sent today to major corporations in the retail, home improvement, travel, and food services industries, who have 30 days to cure and come into compliance with the law.
“In the digital age, it’s easy to forget that our data isn’t only collected when we go online. It's collected when we enter our phone number for a discount at the supermarket; when we use rewards for a free coffee at our local coffee shop; and when we earn points to purchase items at our favorite clothing store,” said Attorney General Bonta. “We may not always realize it, but these brick and mortar stores are collecting our data – and they’re finding new ways to profit from it. On Data Privacy Day, we’re issuing notices to business that operate loyalty programs and use personal information in violation of California's data privacy law. I urge all businesses in California to take note and be transparent about how you're using your customer's data. My office continues to fight to protect consumer privacy, and we will enforce the law.”
On July 1, 2020, the California Department of Justice began enforcing the CCPA by notifying businesses found not to be in compliance with the law. Under the CCPA, businesses that received notices had 30 days to cure or fix the alleged violation before an enforcement action can be initiated. Notices to cure have been issued to entities including data brokers, marketing companies, businesses handling children’s information, media outlets, and online retailers. Today's sweep of notices is part of the California Department of Justice's ongoing enforcement efforts and focuses on businesses that are failing to provide a notice of financial incentive to customers that opt into their loyalty program as required by the CCPA.
Attorney General Bonta is committed to the robust enforcement of the nation’s toughest data privacy law. In July 2021, the Attorney General provided an update on the first year of CCPA enforcement and urged more Californians to take advantage of their new rights. Attorney General Bonta also launched a new online tool that allows consumers to directly notify businesses of potential violations.