How to Disable Phorm

I looked at Phorm in February and again in June, but not really wearing my consumer hat. Now I have an unwelcome opportunity to do just that.

You see, I'm a BT broadband subscriber with multiple users at home, some of whom may not be all that, ahem, technologically inclined. So I'm a bit paranoid that, while I'm not aware of having been asked or consented to using Phorm (branded "WebWise"), other users may have inadvertently switched it on in the course of a BT trial.

Why I am paranoid? Well the service is basically designed to track the browsing habits of all users of the broadband-connected PC or laptop and use this to send more targeted advertising, so that BT and Phorm can make money out of you. But I don't just "browse", I research stuff, work and look after my financial affairs. Other users in the house from time to time will do the same. I don't want this stuff tracked, scanned or whatever else Phorm or BT plan to do with it. And I don't want to be pestered by ads, especially ones that may have nothing do with my real interests. I don't consider that I have a relationship with BT when I use my broadband to access the internet. I permission or de-permission cookies or accept marketing bumph from each of the site I'm happy to deal with. And so on.

I've now done what any good consumer should do. I've looked at the BT WebWise site and even the audit report from Ernst & Young (the mere fact that an audit report is felt necessary chills me to the bone). While these purport to tell me what Phorm is or isn't doing, it doesn't explain BT's role or the data it has access to and retains, or what BT is getting out of using Phorm. The BT terms and conditions (clause 18) aren't exactly encouraging on this point. In fact they are so lacking in material information that they deserve further consideration in light of the Consumer Protection from Unfair Trading Regulations 2008 (which I perhaps rather hastily lampooned - but hey, if they're there, use them). The killer is that the mere presence of this unwelcome "service" casts on me an obligation to constantly police my own computer and all its users to ensure that we're opted-out and remain opted-out. It would be too much to hope that the anti-virus software providers will create a Phorm-killer.

Let's be clear. BT needs to persuade me, as its customer, to opt-in to taking this additional "service". It's not for BT to use my broadband connection to build relationships with people who aren't the accountholder, and get me to police their opt-in/opt-out. It must be BT's problem to ensure that if I don't opt-in (or if I do, but opt-out later) that the effective opt-out works for everybody on my connection all the time.

And to have any chance of persuading me to opt-in, BT must specify in more detail the nature of the data that will be obtained, all the proposed uses of that data, what I am going to receive in return (and don't say targeted ads - show me the reduction in the price of broadband to reflect your opportunity to gain ad revenue), and how I can opt-out and have that data deleted. From a personal standpoint, the "WebWise" service doesn't go far enough in this regard for me to trust it. Nor should the current level of disclosure be enought for BT to be able to claim they have my consent to thing under the Data Protection Act - I simply don't consent, anyway.

So, not trusting BT on the particular issue of how to stay opted out, I did a quick Google search hoping to learn how you would really know that you were not signed up, and how to switch it off completely. No luck.

The Register, which has done a lot of digging on Phorm in the past, and got a very concerning post from Chris Williams on 3 October. According to Chris' discussions with BT, they seem to track your usage whether you're opted in or out... so they can record whether you have opted in or out. You then simply have to trust that they won't sell or otherwise use your data to get extra ad revenue, fall victim to organised criminals, or allow the authorities to mash it with the Communications Database (you'll recall that the UK government has been particularly supportive of Phorm).

All the technical detail is in Richard Clayton's excellent piece on Phorm. His research suggests that you can add the Fraud Act, Computer Misuse Act and the Regulation of Investigatory Powers Act to your reading list before deciding whether or not to sign up to WebWise. And even intellectual property rights owners have a serious set of bones to pick, as Nicholas Bohm and Joel Harrison have fulsomely discussed in their excellent September article for the Society for Computers and Law. But none of that is going to occur to the average consumer, so why is the government not taking their corner instead of Phorm's..?

Who knows. For my money, it's time to switch broadband providers.

Speaking of which, I see that Orange is attempting to make a virtue out of not using Phorm.

LinkedIn Goes Social

LinkedIn has just added various collaborative, work-oriented applications to its platform. But I'm struggling to get beyond it as a fairly static place to hold your CV and network in a fairly basic, formal sense. I do receive requests for my services via LinkedIn, and it's useful for making introductions and learning a bit about someone you're scheduled to meet or call – the whole reason they published their profile. I guess people might use it as a “work” platform, add their blogs stc and yet retain the air of formality. But not all of that seems compatible. We'll see.

In the meantime, Facebook still seems more engaging and better aligned with the blurred social, business and academic blogosphere - it's the equivalent of meeting with the founders of a start-up in Starbucks, or with colleagues in a bar to talk shop and whatever else is going on. So that's where I prefer to share my blog, for example.

It will be interesting to see whether, and if so, how Facebook reaches out to the business community as LinkedIn evolves to be more engaging.

Travels in the Blogosphere

Phew! What a journey, and what a pleasure to have so much great stuff to consider and comment on over the past week, including:

• the iPod of financial services on Guillaume's blog;
  

• the European Commission's e-money plans on panGloss;
  

• the EC's consumer protection plans on Digital Law;
  

• discovering that European Commissioner Meglena Kuneva has launched her own blog;
  

• the future of cash at Digital Money Forum; and
  

• the impact of prescriptive regulation on financial services innovation at The Bankwatch.

Thanks, folks, please keep it coming!

In the meantime, I reckon I'll need another week off...

Be Careful Saving With Your Mortgage Lender

You'll be aware of recent concerns about how much of your deposits are covered by the UK's Financial Services Compensation Scheme.

Their general guidance on the subject is here, but there was a twist announced indirectly at a recent conference - hat tip to the Fool Blog:

• if you have an offset mortgage - where the bank agrees to credit your savings against your mortgage balance and only charge interest on the difference (if any) - then if the bank goes under, your savings will simply be deducted from the mortgage balance, even if those savings exceed £50,000. So you won't actually have access to the money anymore (unless, perhaps, the mortgage is taken over by another bank on the same terms and you can draw down again, or you remortgage, which will cost you interest).
  

• if you're an ordinary saver who just happens to have deposits with the same bank who has your mortgage, indications are that the FSCS will treat you the same as if you had an offset mortgage, although only £50,000 of your savings may be protected. Again, you could merely be treated as owing the bank less, and not actually get your savings paid back to you.

It does seem fair that the FSCS is able to offset deposits against mortgages or other loans in the event of bank insolvency, regardless of whether or not you agreed an offset mortgage. The higher deduction for offset mortgagors is also fair. Otherwise, people who've saved more than £50,000 and who were therefore able to take on a bigger mortgage than their income might have supported, could find themselves penalised. That would be inconsistent with the principles of recent mortgage regulation.

But this could be a disaster for anyone who's tried to set aside 3 to 6 months' net salary as "rainy day" money - as a buffer against unemployment, lengthy illness etc.

So, you should consider making sure that your rainy day money is not deposited with your mortgage lender. Worth checking with the FSCS before making the decision. Here are their contact details.

Consumers Paying For Services That Are Free

In these troubled times, we as individuals must take economics into our own hands - cut costs, repair balance sheets. And so on.

One needless expense is the purchase of complaints handling services from private suppliers when the alternative is free of charge.

Not only does that cost you money, but it also means your complaint may not be visible to the authorities. So there won't be as much pressure on the product provider to cure the problem you're complaining about.

Topical examples include:

• financial services claims management companies - why pay these guys, when the Financial Ombudsman Service (FOS) is free to consumers? The regulated product providers must pay FOS's fee for handling the dispute. That's an added incentive to resolve your complaint more quickly, and to avoid causing problems in the first place. But, as I've pointed out before, some claims management companies and law firms continue to promote services where the consumer bears the expense. There is even speculation within the industry that some product providers who've mis-sold financial services in the past are either starting up claims management companies or selling lists of affected consumers to them in order to profit from curing the problem they helped create. Your first complaint should be the product provider. But, if you aren't satisfied, then FOS is your best bet. Going to the media might sound attractive, but you shouldn't have to bear your soul in public to get a private financial matter resolved.
  

• call blocking services - sure, cold calls are annoying - especially those from an automated calling system that fails to connect anyone when we pick up the phone (known in the industry as "silent calls"). But rather than pay for a blocking service, the best solution is to help ensure the people using these systems get named, shamed and fined. That way, it's the perpetrators who will demand - and pay for - the improvements in technology that stops this happening, not you. So, before you pay for one of these blocking services, complain to Ofcom or the Information Commissioner. The Ofcom policy on the subject is here. You'll be comforted to hear that Ofcom fined Barclaycard the maximum fine of £50,000 for breaching the rules on silent and abandoned calls last month. It may not sound like much, but it will end up saving you money on a blocking service.
  

We all whinge when the Government doesn't act. But we only have ourselves to blame if they do act and we don't take advantage - and end up paying for it.