As if wireless carrier customer service couldn't get any worse. Over the past few weeks multiple media reports have found Verizon Communications (NYSE:VZ) and AT&T (NYSE:T) are tracking the online history of their wireless customers using "perma-cookies" or "supercookies."
It's not all that surprising the companies are doing this, but it's the extent of the tracking that has some people concerned. For the nation's top two wireless carriers, the tracking could eventually hurt the strong customer loyalty the companies have worked hard to build, especially given the fact that Sprint and T-Mobile have abstained from similar tracking so far.
Why this stinks for customers
According to Wired, these perma-cookies are "viewable by any website you visit, and it could be used by advertising networks to build elaborate profiles of everything we do online."
Verizon is already using the cookies to allow marketers to target ads to its users, while AT&T is still testing out the cookies. Like most online tracking, many customers don't know it's happening, even though about 100 million AT&T and Verizon customers are being tracked.
The main problem with these perma-cookies is the amount of time they stick around: forever. Verizon and AT&T place the cookies on smartphones when a user accesses the Internet from their networks, and they don't get deleted if a user erases their browsing history.
The article went on to note that even if users turn on a do-not-track setting in their mobile browser, the tracking still takes place. So it's not just that Verizon and AT&T are tracking customers (since 2012 for Verizon), but that it's also a more permanent tracking than other companies typically do.
Why the companies should knock it off
Both Verizon and AT&T are at the top of the list for network quality, so it's a shame to see the companies participating in something that's could potentially infringe on their users' privacy.
RootMetrics currently ranks Verizon as the top performing wireless network overall, with AT&T following closely behind. Because of its strong network, Verizon has some of the most loyal customers and lowest churn rates -- the percentage of customers that leave the company -- in the industry.
Morningstar analyst Michael Hodel, recently wrote in an investor note, "We believe Verizon Wireless' continued strong customer loyalty indicates that a large percentage of customers choose the firm for attributes it controls directly, including its network reputation."
It's clear Verizon also controls the ability to track its customers as well. And it'd be a shame for the company to risk the customer loyalty it's built in order to make a quick buck off selling its customers online history to advertisers. Verizon allows customers to opt-out of the perma-cookie tracking, but those who opt-out will still be tracked, the company just won't sell the data to marketers. The problem with that is it still allows third-party websites to use the cookie to track Verizon users, even after it's technically disabled.
Most online users know they're being tracked by companies, but it seems even more of a violation when customers are paying for expensive wireless plans each month, only for their service provider to then make more money off of them by selling their browser history to marketers. Hopefully AT&T and Verizon will realize this is a bad way to maintain their relationship with customers, and instead pursue more forthcoming ways to boost revenue.
If you're wondering whether or not your wireless carrier is tracking your smartphone usage, you can find out here. Or, if you're a Verizon customer not on a business plan, you can probably assume worst.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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