The Rise of Customer Blacklists
posted by Daniel Solove
Blacklists appear to be the rage these days. With the ease of storing and sharing personal information — coupled with lax privacy law restrictions on such activities — companies can increasingly create blacklists of bad customers. In this article from the Ottawa Citizen, hotels in Australia and Canada (and soon the United States) are signing up for a service that compiles a blacklist against “bad” hotel guests:
Blacklisting everyone from the whisky-swilling scoundrels whose partying sabotaged your last vacation to the louts who channel Pink Floyd by dismantling their rooms, the new Australian database — which is expected to expand to Canada and the U.S. by year’s end — helps prevent unsavoury individuals from obtaining short-term accommodations.
“People are becoming less considerate of the space they’re staying in,” says Josh Ginty, project manager of the Guests Behaving Badly registry.
“What we hope to do is proactively advertise to those people … that their details will be recorded if they breach house rules. That in itself is often a strong enough deterrent.”
Accessible only to operators of hotels, motels and vacation homes, the membership-based registry tracks five levels of guest misconduct. These range from “lower-level blatant disregard” for regulations, such as smoking in non-smoking rooms or swimming in the pool after hours (several staff warnings must be ignored before the activity is reported on the registry) to higher-level infractions such as non-payment of the hotel bill, assault or vandalism.
“If you steal a couple of towels, we’re interested in tracking that,” says Mr. Ginty. “But it doesn’t compare to someone who has verbally or physically abused the night manager.”
More than 1,000 properties have signed up for the service since it launched in December 2006. Expansion to other continents is planned to begin in six months, depending on how easily the database can be adapted to each country’s privacy laws.
Customers have the ability to rate hotels with websites such as TripAdvisor.com. So why shouldn’t hotels be able to rate customers?
I don’t view the situations as symmetrical. Customers have long been spreading their opinions about hotels and other businesses — this is how the market produces good products and services. Word about bad hotels gets out and it leads to less business, thus creating an incentive for hotels to improve their service. But what happens when a similar process works against customers? True, some hotel guests are obnoxious and destructive, but do we really want to live in a country where people find themselves routinely blacklisted from various hotels and other businesses (stores, etc.)? In a Seinfeld episode, Elaine once found herself on a blacklist by doctors for being a bad patient. Perhaps this is the trend of the future. I sure hope not.
March 3, 2007 at 12:27 pm
Posted in: Consumer Protection Law, Privacy, Privacy (Consumer Privacy)
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Responses (12)
Cathy - March 3, 2007 at 1:41 pm
Don’t hotels (at least in the US) have some sort of common carrier status? I may be conflating things, but I remember them having the same higher duties of care towards guests that common carriers like transportation providers do. Which is not to say that they couldn’t refuse service in all situations, but that their ability to do so might be limited.
Miriam Cherry - March 3, 2007 at 6:17 pm
I understand the privacy concern, which I think is what leads you to come out the way that you do in this post.
At the same time, if customers are trashing hotel rooms, why should we have sympathy for them? Aren’t we just giving them the same incentives to behave (and not steal the towels) that hotels are under?
Cathy (above) has a good point - hotels are subject to public accommodations laws…
Daniel J. Solove - March 3, 2007 at 6:31 pm
Miriam — the problem is that the customer critiques of businesses and blacklists of customers don’t have equal effects. A business can readily reinvent itself; it can change and redeem itself. And if its name gets too tarnished, it just changes its name, as many companies have done under these circumstances. Or If the company is really bad, it goes bankrupt and the people running it start a new company or go elsewhere. In contrast, when people are blacklisted, it is unclear whether they ever have a chance to redeem themselves.
And what if they are vindictively put on the blacklist because they complained too much about lousy hotel service? Can they ever get off? How do they correct such erroneous listings?
If a hotel receives an erroneous bad comment or two on a ratings website, big deal. Other folks will chime in with the correct information. But the blacklists don’t operate in this way. Once you’re on, there appears to be little you can do to get off.
It is true that some hotel customers act really badly and trash hotel rooms and steal things. If they do this, then the hotel should file a criminal complaint. But blacklists strike me as a cure that might be worse than the disease.
Miriam Cherry - March 3, 2007 at 11:09 pm
Hmmmm… I think that you may be winning me over… but just to play devil’s advocate, wouldn’t calling the police be an extreme option? One that would ultimately be far worse to the guests (and harder to clear) than just blacklisting them?
On something completely different, I wonder if there have ever been any rowdy wardman park stories… aspiring lawprofs throwing water balloons from the balcony at 3am…
anon - March 3, 2007 at 11:20 pm
Interesting. Banks have a similar blacklist for bank accounts, which has also drawn some criticism. See http://www.law.nyu.edu/journals/lawreview/issues/vol80/no5/NYU506.pdf
Daniel J. Solove - March 3, 2007 at 11:34 pm
Miriam — the police at least add a modicum of due process to the mix. If a patron’s conduct is extremely bad and destructive, then it is a criminal act and that patron should be punished. I’m not sympathetic to a person who steals or vandalizes. But I am sympathetic to people getting stuck on some blacklist, without any due process or control for errors or vindictiveness, and never having any opportunity to get taken off of it. Blacklists strike me as a self-help way of circumventing the rule of law, and I find it problematic when people or businesses take the law into their own hands.
Alex - March 5, 2007 at 2:29 pm
This seems like a great idea to me. Hotels obviously know that a certain fraction of customers are destructive a–holes, and presumably already take that into account when they charge us for staying there. Why is it fair that law-abiding people are charged higher rates b/c of the actions of others? Conceptually this hotel-reporting arrangement is analogous to credit scores or information about prospective tenants: I personally don’t want to be paying a premium for the possibility that I’m a deadbeat when I’m not. (One standard objection to this argument is that markets aren’t perfectly competitive, so you can be sure that the hotel wouldn’t just pocket the gain from knowing that you’re a “safe” customer. This isn’t really defensible, though, to the extent that you think hotels are trying to make as much money as they can from you in the first place — even if they’re already gouging you, they “gouge” you more to the extent that they think you’re a risky customer.)
I’d make an appeal not just to economic efficiency but to a philisophical decision between egalitarianism or individualism. The two are consistent until people begin to take actions distinguishing themselves from each other–then they diverge. I like being judged on the basis of what I do rather than what someone else does.
Finally, with respect to the possibility of abuse: this certainly might be a problem, just as abuse with credit scores is a problem. Smart regulation could cope with this, however, by having options for arbitration and certain customer rights — as with credit scores. In any event, if I were a hotel I wouldn’t be all that interested in a blacklist if I thought it was chock-full of petty and frivolous complaints lodged against customers by my competitors.
Paul Gowder - March 6, 2007 at 4:19 pm
Part of what’s motivating Dan’s intuition seems to be a notion of forgiveness. As he notes, one reason it’s asymmetric is that hotels can go bankrupt, change names, etc., and reinvent themselves, people can’t.
Maybe that’s a way to save this: take Alex’s credit report example all the way. Regulate it, and ensure that after a certain period of time people are “forgiven” by having their name taken off the blacklist.
Peter G - March 27, 2008 at 12:41 am
Daniel - Is customer blacklisting really on the rise? You state that this practice is the “rage”, but only reference one industry, accommodations. Another comment posted advises on the banking industry use of blacklists, but does this indicate it is a practice spreading through business?
On the practice itself, in the one industry you noted: I can use an annonimous form of “payment” to reserve my accommodations (i.e.: a “gift” charge card, a relative’s credit card, a business credit/charge card, etc.), negating any personal information I provide.
Realistically, how effective would a system such as this be with obvious means to circumvent it? And, more importantly, how prolific is the practice in all business areas and is it REALLY on the rise?
Mark Langton - June 22, 2008 at 12:03 pm
Being a hotel owner in Spain I really can see the need for a bad customer register, customers treat hotels very badly and my recent experiences with rude, obnoxious and aggressive customers have made me consider starting a web based register in Europe, I know many hoteliers that have had recent bad experiences with A??holes that seem to have an agenda to ruin all of the other customers days and make the hotel look bad prompting customers to leave bad feedback on sites such as Tripadvisor etc.
I suppose that you need to be or have been a hotelier to understand the annoyance and the financial cost of handling these members of the public, we run a great hotel where the customer service is God yet some people will never be happy.
Its a good idea and I am amazed that someone has not thought of it before.
Tricia - April 1, 2009 at 10:47 am
How do I get a copy of this ‘black list’ of customers?
Tricia - April 1, 2009 at 10:48 am
How do I get a copy of this ‘black list’ of customers?
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