WASHINGTON—With facial recognition now being used for payments by some retailers, and with credit unions and their vendors also testing the technology as a means for member identification, a case involving Rite Aid and the FTC deserves credit unions’ attention.
In the case, Rite Aid will be prohibited from using facial recognition technology for surveillance purposes for five years to settle Federal Trade Commission charges that the retailer failed to implement reasonable procedures and prevent harm to consumers in its use of facial recognition technology in hundreds of stores.
The FTC said mistakes led to “humiliation” for many customers who were misidentified.
The proposed order will require Rite Aid to implement comprehensive safeguards to prevent these types of harm to consumers when deploying automated systems that use biometric information to track them or flag them as security risks. It also will require Rite Aid to discontinue using any such technology if it cannot control potential risks to consumers. \To settle charges it violated a 2010 Commission data security order by failing to adequately oversee its service providers, Rite Aid will also be required to implement a robust information security program, which must be overseen by the company’s top executives.
What Complaint States
In a complaint filed in federal court, the FTC said that from 2012 to 2020, Rite Aid deployed artificial intelligence-based facial recognition technology in order to identify customers who may have been engaged in shoplifting or other problematic behavior. The complaint, however, charges that the company failed to take reasonable measures to prevent harm to consumers, who, as a result, were erroneously accused by employees of wrongdoing because facial recognition technology falsely flagged the consumers as matching someone who had previously been identified as a shoplifter or other troublemaker.
The FTC said preventing the misuse of biometric information is a high priority for the agency, which issued a warning earlier this year that the agency would be closely monitoring this sector.
For credit unions working with vendors, it should be noted that according to the complaint Rite Aid contracted with two companies to help create a database of images of individuals—considered to be “persons of interest” because Rite Aid believed they engaged in or attempted to engage in criminal activity at one of its retail locations—along with their names and other information such as any criminal background data.
Low Quality Images
The company collected tens of thousands of images of individuals, many of which were low-quality and came from Rite Aid’s security cameras, employee phone cameras and even news stories, according to the complaint.
The system generated thousands of false-positive matches, the FTC said.
“For example, the technology sometimes matched customers with people who had originally been enrolled in the database based on activity thousands of miles away, or flagged the same person at dozens of different stores all across the United States, according to the complaint,” the FTC said.
The Best Way to Start a New Year. With Something Free.
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?