Online sleep company Casper is currently under fire for allegedly wiretapping consumers through its website.
Back in 2018, the company was hit with a similar lawsuit, but the plaintiff dropped it before it could go to trial and nothing ever came of it.
The new plaintiff, Arisha Byars, filed the class action complaint against Casper on July 22 in a California superior court, alleging violations of the California Invasion of Privacy Act (CIPA). On Oct. 12. Casper filed a notice to remove the lawsuit to a California federal court.
According to Byars, Casper “installed software on its website that allows it to surreptitiously record every aspect of a visitor’s interaction with the website, including keystrokes, mouse clicks, data entry and other electronic communications.”
Casper is far from the only company that’s ever been accused of wiretapping its customers — Gamestop came under fire a few months ago, Intel was accused last year, and just last week a class action suit was filed against Overstock.com.
“To enable the wiretapping, Overstock covertly embeds code into its chat feature that automatically records and creates transcripts of all such private conversations,” the Overstock suit alleges.
From my point of view, one of two things is happening
Either 1. these companies are averting privacy laws with intricate technicalities that allow them to eavesdrop, or 2. they are so desperate to gather customer information that they’re breaking the law without realizing how much consumer trust they’re going to lose — regardless of the outcome of the case.
If you lose consumer trust, you lose the consumer, and you may even lose their friends if it becomes national news. Their information is much less valuable if they don’t want to shop with you for ethical reasons.
It’s really a lose-lose situation for everyone.
But Casper and Overstock are huge companies, and though they will face backlash, they will likely recover.
If a smaller retailer tried to pull this, there may be less forgiveness and more severe consequences.
That’s just one reason that building trust with consumers is so important — but also following through on that trust with ethical business practices is even more critical.
It’s also how smaller and mid-size retailers can compete with big box stores and e-commerce giants.
Information sharing online is a privilege. Customers are willing to allow websites to keep track of their information when they allow cookies, which every website askds.
And when you abuse that trust, you lose the customer.
If you ever implement new technology and question its ethicality, take a minute and regroup.
Don’t move forward and hope for the best — because even if you do get away with it at first, as a smaller retailer it will catch up to you and it could damage your reputation beyond repair.