AmEx Denies It Sells Data on Cardholders

American Express Co. does not sell information about its cardholders’ spending habits to outside parties, a company spokeswoman said Wednesday, disputing a report about its role in the creation of detailed profiles of consumers.

Gail Wasserman said an article in Wednesday’s edition of USA Today about a venture between American Express and a North Carolina company, KnowledgeBase Marketing, contained “inaccurate statements.”

“American Express does not sell or provide individual transaction information to any third party for marketing purposes,” Wasserman said.

Tuesday, American Express and KnowledgeBase announced a partnership to develop services to help merchants scout prospects.

USA Today, a publication of Gannett Co., is standing by its story, according to Tara Connell, a managing editor.

American Express is one of the nation’s largest credit and charge card issuers, with 29.5 million cards in the United States and 13.8 million outside the country.

Wasserman said it is no secret that American Express works with sellers of goods and services to develop mailing lists for specific offers.

She cited an example of an American Express customer who flies to Paris six times a year. She said the company may work with some merchant to tailor a particular sales pitch to that cardholder. She said any mailing based on the information is limited to one use and that the merchant cannot copy the information and put it in its own database.

More than 90% of American Express cardholders decline to “opt out” of such marketing activities, Wasserman said. She said many like to receive information about special offers on products and services they use, and that they are not bombarded with sales pitches for things they do not want.

One analyst thought the issue was getting more attention than it deserved. “It’s become common,” Tom Facciola of Lehman Bros. said. “You buy something out of a catalog and the information gets passed around.”

Database mining is a growing field in which companies use computers to track consumer activities and compile detailed files. One critic, Evan Hendricks, editor and publisher of a Washington-based newsletter called Privacy Times, said there are a number of dangers.

He said information about spending can be combined with public information about such things as homeownership, vehicle registrations, and licenses to operate a boat or private airplane. The end result is a very detailed profile of an individual.

“There is clearly a trend toward this sort of thing throughout the financial world,” he said.

Hendricks said he advocates passage of a national law that would allow consumers to opt out of any arrangement that allows records of their spending to be sold to third parties. He said the law should provide a remedy if a consumer’s wishes are not respected.