Why Do They Want My Phone Number?

On the checkout line this holiday season, make sure you have everything on your gift list, your cash or credit card ready -- and, oh yeah, get set for one more thing.

"Can I have your phone number, please?"

"I hate that," said Larry Ponemon, a former corporate auditor who founded the Ponemon Institute, a Michigan-based think tank that studies privacy, data protection and information-security policy.

Hate it or not, more stores are asking for phone numbers or other personal information, and that has some privacy experts concerned.

"The various data companies are trying to acclimate people to invasions of privacy. It started with the zip code and now it's moved on to phone numbers," said Chris Hoofnagle of the Electronic Privacy Information Center in San Francisco. "I'm willing to bet that retailers' market research is showing a willingness of customers to share the telephone number, and that's why it's happening."

Privacy advocates advise against revealing such information, because it can be the key to accessing more sensitive information about you.

"I think a lot of stores, to be fair, they're not abusing your privacy," said Ponemon, who once audited an unspecified chain store's use of customer data and found it ethical. "But some stores are thinking there's money in your data."

Because a phone number often can be used to look up a customer's address, stores say it helps them send special offers through the mail or tailor those offers to a customer's prior purchases. Many stores have signs explaining such a policy near checkout counters. Such signs commonly add that the stores don't share their customer information with third parties.

Susan McLaughlin, a spokeswoman for Toys R Us Inc., said its stores have asked for phone numbers for several years. She believes most customers have no problem voluntarily giving their numbers at the register -- though it's "no problem at all" if they decline.

"It's so we can send you offers, coupons, et cetera, and we don't sell it to third parties," she said. "I'd say the majority of people like getting coupons."

'Hub of Customer Identification'

But phone numbers can be used to organize much more than just who gets the best coupons, and that's what worries the privacy experts.

"The telephone number is really becoming the hub of customer identification," said Hoofnagle, in San Francisco. "Consumers do not understand that giving out the phone number allows the business to buy more information about the consumer through a system known as enhancement."

Companies that specialize in enhancement can generate things like marketing profiles, credit reports or background checks on individuals. Two database companies, Acxiom and Experian, did not return calls from ABCNews.com seeking comment. A spokesman for a third, ChoicePoint, said that the company's data collection did not extend to retail stores, and that it did not index data via phone number.

"Telephone numbers are an element of the information used by ChoicePoint to verify a person's identity," spokesman Chuck Jones said. "However, none of ChoicePoint's products begin the verification process with a telephone number."

But if a store sought to gather data starting with a phone number, Hoofnagle explained how it might occur.

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