The Federal Trade Commission (FTC) has banned Rite Aid from using facial recognition technology for the next five years due to charges of its AI-powered surveillance system lacking safeguards and falsely identifying customers as shoplifters.
While Rite Aid was working to get ahead of shoplifting by using facial recognition to flag potential criminals, their tactic backfired. The technology began flagging innocent customers leading to a further invasion of privacy and unveiling more hidden information security problems within the company. They must now implement an information security program when using biometric-based systems or face permanent discontinuation of the technology.
Why it matters: The misuse of surveillance cameras in Rite Aid stores and the interference of the FTC’s Bureau of Consumer Protection proves their dedication to protecting the public from unfair security practices.
- “Rite Aid’s reckless use of facial surveillance systems left its customers facing humiliation and other harms, and its order violations put consumers’ sensitive information at risk,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
- The company violated a 2010 data security order by neglecting measures like accuracy checks, preventing the use of low-quality images, and inadequate training for employees operating facial recognition technology.
- The proposed settlement by the FTC mandates third parties to delete collected images and notify consumers when biometric data is used. Rite Aid, currently undergoing bankruptcy proceedings and closing around 200 stores nationwide, denies misuse and respectfully disagrees with the FTC’s claims.
