Briefs

researchpipeline, by admin, February 14, 2009

I recently read a couple of interesting articles about how corporations are using data mining to bolster their businesses.

The first article, in the NY Times, described American Express�s policy of lowering the credit limits of customers who had shopped at certain retail outlets. Using their proprietary dataset gathered over their customer base, American Express had identified certain retailers whose customers had a hard time paying their credit card bills. They concluded that all customers who shopped at these stores were a credit risk and correspondingly lowered their credit limits. The catch here is that American Express did not reveal their retailer black list. So customers had no way of knowing which stores to avoid. Wallmart? Niemann-Marcus? Baskin-Robbins?

Once the story appeared into the press American Express recanted its policy. In fact, they went one step further and insisted this had never been their policy, despite thousands of letters to "trimmed" customers that explicitly detailed otherwise.

Read more.