| Horror stories about
identity theft, cyber-stalking, and vending of personal profiles have immensely elevated
the typical Web surfer's level of concern over online privacy. In fact, a recent study
released by the Pew Internet and American
Life Project reveals that 86 percent of online users are concerned that businesses or
people they don't know have access to personal information about themselves or their
families. Businesses who risk their customers' privacy are risking their customers'
loyalty and continued business.The Pew study shows that only 10 percent of these users
have disabled the Internet's tracking tool called "cookies" on their computers,
and that 56 percent of 'Net users don't even know what these online monitoring tools are.
Some businesses do abuse cookies, and many privacy services cite this as an enormous
issue, because cookies not only store personal data provided by the user, but may also
collect information through the user's actions -- without the user's knowledge. Cookies
can be combined with existing databases of identifiable information, through what is known
as "data aggregation" and "data triangulation." When this happens,
companies can assemble comprehensive and detailed online profiles that can then either be
sold to other businesses or used to manipulate the user's Web experience. Increasingly,
customers are demanding a greater say in how their personal information is used and
collected, and the privacy issue is heating up. To date, more than 50 individual pieces of
privacy legislation have been introduced in the U.S. Congress, and privacy and consumer
groups are promoting increased awareness and solidarity. While knowing more about your
customers is important, letting your customers understand your actions and permitting them
to set appropriate limits will become critical to holding on to those customers and to
making them feel as though you have their interests at heart.
Educating Your Customers
Education
is an important aspect of making customers feel informed and comfortable with the amount
of information that you are collecting. If you choose to collect personal information
and/or use cookies to help you help your customers, take a first step toward improving
customer relations by providing an easy-to-read privacy statement. Be sure that your
privacy statement tells your customers how you are collecting information, what
information you are collecting, and what you will do with the information. In addition,
let them know how to tell you that they don't want you to collect their information. Your
customers need to feel as though they have choice and control. You may also need to help
them understand the issues. The paragraphs that follow contain information that you may
wish to post on your site.
Cookies
are Internet tools that can:
- keep customers from having to repeatedly provide
their names, passwords, or other, often-used information
- improve the level of service that you can give
customers, by analyzing the sites or pages that they visit to determine their needs and
interests
- find the perfect moment to offer help or
personalized services by tracking what customers are doing
Assessing Your Customer Profile Needs
But cookies can provide the above services
without picking up identifiable information like names, addresses, and phone numbers,
because you control what they collect. You can set them to capture the pages visited by
your customers, and then anonymously store an activity or interest profile for that
customer. But when you ask them to register to be a member of your online community, sign
up for a free subscription, or fill out a form for an online purchase, and you collect
this information, you are asking them to provide a "self-reported" profile.
Statistics show that they
may be willing to do so, if you give them something valuable in return. After all, their
information is a commodity. As far as they are concerned, their self-reported information
can be sold or placed into the public domain, unless you give them the opportunity to
specify that it "should not be shared with others." Anonymous cookie data plus a
customer's self-reported profile can be linked together to create an online user profile
complete with name, address, contact numbers, sex, marital status, credit card numbers,
income bracket, family size, hobbies, interests, and buying preferences. In addition,
through "data triangulation" marketers who have access to public records as well
as online profiles can effectively build personally identifiable dossiers of your
customers and every other online user for target advertising. In effect, all online users
may already have unwittingly thrown open the doors to advertisers, marketers, and maybe
the rest of the world, and totally given up their privacy. If your customers sense that
you are contributing to this practice, they will ultimately direct their anger at you, and
studies show that the vast majority of consumers find this kind of linking both
frightening and abusive.
As information about their online habits and
preferences is combined with their personal information, the potential for "data
aggregation" increases, and so does the value of that information to marketers who
want to establish communication with similar shoppers. For many business owners struggling
to make Web sites pay off, selling such profiles becomes a great temptation. But if you
want to maintain the goodwill of your customers -- and their continuing business -- it's a
temptation you should resist. Surveys indicate that having their personal information sold
and triangulated is the issue about which customers feel most strongly.
Data
Triangulating Public and Private Information
How do marketers gain access to private customer
information? Every person who has ever purchased something online or completed a complex
offline transaction, such as applying for telephone service, a driver's license, a social
security number, medical insurance, a loan, a credit card or bank account, has a profile
in the vendor's or service provider's computerized database. That profile stores the
individual's personal and contact information, and other bits of information essential to
the purchase or service. Some of these records are public domain but some are supposed to
be confidential enough to be protected by federal laws. However, most of them can be
accessed online, with some restricted individual records available to interested parties
for a minimal fee. For example:
- USSearch.com
claims to be the worldwide leader in public record information and has access to several
restricted databases. Public record reports containing basic information such as
addresses, spouses, civil judgments, bankruptcies, and property ownership are available
for $39.95; criminal records are $25 per person per county; and to verify one's own public
record, the fee is $50. Other online vendors of public information are Discreet Research, Inc., Information America, Inc., and Infotel Group. Some sort of legislative control of
these services will likely occur in the next few years.
- The top three consumer reporting agencies (CRAs)
that keep records of credit histories are Equifax, Experian, and Trans Union.
According to rules stipulated in the Fair Credit Reporting Act
(FCRA), CRAs can release copies of an individual credit report to third parties who have a
"legitimate business need," which basically includes current and potential
creditors, landlords, insurance companies, investors, and current or potential employers.
Also, the FCRA is silent on the use of credit reports for the generation of targeted
marketing lists, and not precise about the restrictions on the creation of lists of
pre-screened consumers for offers of "pre-approved" credit and insurance
coverage. Any individual who obtains a credit report under false pretenses is subject to
penalties, of course. But determined data aggregators who already have a person's name,
address, and credit card numbers can afford the mere $8 processing fee for a chance to
either offer that person a new credit account or sell the information to list brokers.
Again, this is an area in which consumers will not tolerate abuse much longer.
Online list brokers
harvest and buy names, addresses, and personal profiles from various sources like phone
directories, public records, surveys and consumer profiles, and sell them to companies and
individuals who seek targeted lists for direct marketing. InfoUSA
is one example. The company claims to be the leading provider of information for about 11
million businesses, 120 million consumer households, 575,000 physicians and surgeons, and
and 3.4 million executives with business, demographic and lifestyle details. The company
maintains profiled information that includes name, address, phone number, email address,
income, age, occupation, marital status, number and ages of children, home ownership,
credit cards, and hobbies and interests. Requests for specifically targeted sales lists
and leads cost $1.00 per record for 1 to 24 records, and 8 cents per record for a sorted
list of 25,001 to 100,000 records. Whether or not the individual sources of these records
volunteered their private profiles would be difficult to ascertain, and increasingly,
customers who find that a business knows too much about them may become less, rather than
more likely to purchase from that business. Many customers are already so afraid of
releasing too much information that they are deliberately providing false information to
Web sites in an effort to protect their privacy.
Safeguards
and Precautions
The online world has not only facilitated the
breakdown of the individual's privacy; it has also promoted the agenda of entities that
make money by selling personal information. And to add insult to injury, online users now
have to go out of their way and spend considerable time and effort to ensure that they
maintain a decent level of online privacy, or to try to restore the level they once had.
By
employing a few simple techniques, you -- as an online business -- can take advantage of
your customers' concerns to get a jump on your competition. Here are just the basic
measures you can take to let your customers know that you are not harvesting their
information, tracking their activities without permission, or profiting from their life
styles:
- Cover their tracks. Let them
disallow cookies on your site or prompt them to set their browsers to warn them when a
cookie is being dropped into their system so that they can choose which ones they will
allow. Remind them to clear their memory cache or history folder as well as their
temporary Internet files folder when they're finished surfing the Web.
- Urge them to read your privacy policy.
Every time you ask them to input personal information, remind them to check your privacy
policy to see how that information will be used. Remind them that their information is
safe and secure with you and will not be sold or otherwise shared with anyone.
- Get certified for privacy. Have
your privacy policy checked by TrustE or some other
privacy group, and make sure that your customers know that you have passed such an
inspection by displaying the certification logo on all pages where you collect personal
information. Make sure that you also tell them what that certification means.
- Make sure any forms that they fill out
are secure. Use a secure address and explain to your customers what measures you
are taking to ensure their safety. Many customers now know that a secure page starts with
"https:" and the symbol of a yellow padlock appears at the bottom of their
browser, but a good number still do not understand what happens and precisely what it
means for them.
- Let your customers opt-in, instead of
having to opt-out. Instead of asking them to uncheck a box giving you rights to
use their personal information, let them make the choice about whether or not they want to
participate. Provide tiered services so that they can choose whether or not to provide
certain information or participate in specific sections of your Web site.
- Help them learn. For information
on ways to control how their personal data is collected and distributed, let them know
that they can check out a number of Web sites including:
Price
to Pay
Some online users don't mind sharing sensitive
information with you, with marketers, and with other Web denizens; many even post the
details of their lives on their home pages. Most individuals, however, value their privacy
and would rather not be hassled by sales pitches, crank calls, and the like. There are
also those who are particularly peeved at the idea that some businesses make money from
their personal information, and have chosen to join privacy advocacy groups, if not go
offline altogether.
The
Internet is a venue that touts access, convenience, and instantaneous information. But at
the same time, it fosters the abuse of these very features, and in the process the rights
and privacy of its users are jeopardized. Whether the cyber-world ignores, condones, or
challenges these privacy issues, in the end the online user still pays the price, and
users are quickly becoming tired of paying. Let your customers know that you are on their
side by implementing safety measures for their protection and giving them choice and
control over how you use their personal information. In an environment where privacy is a
problem for many of your customers, you may find that it will pay to make yourself part of
the solution. |
