Consumer Surveillance and Financial Fraud / Bo Bian, Michaela Pagel, Huan Tang.

Format:

Book

Author/Creator:

Bian, Bo.

Contributor:

National Bureau of Economic Research.

Pagel, Michaela.

Tang, Huan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31692.

NBER working paper series no. w31692

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Companies near constantly surveil their customers to collect, analyze, and profit from their private information. A prevailing concern is that the market for private data and security breaches expose consumers to financial fraud. In this study, we exploit Apple's App Tracking Transparency (ATT) policy, which greatly limited the tracking and sharing of personal information on the iOS platform, providing a major shock to the data industry. Using a difference-in-differences design and granular variations in iOS user shares across the US, we find that if 10% more people disallow tracking, the number of financial fraud complaints in the average zip code decreases by approximately 3.21%. We then show that the effects are concentrated in complaints related to lax data security and privacy, identified using keyword searches and machine learning on complaint narratives, and in complaints about firms that engage in intensive consumer surveillance and lack data safeguards. Our evidence quantifies one of the main consumer costs of lax data security standards.

Notes:

Print version record

September 2023.