Firms respond to consumer privacy fears
Atlanta Business Chronicle - by Philip Nutman
Within a week of including his e-mail address along with a mortgage application, Dalton Media CEO Michael Lang was deluged by spam from other mortgage and financial companies.
"I have three e-mail addresses, and even those I didn't list started receiving the same unsolicited offers," Lang said. "Prior to the application, I occasionally received some kind of financial spam, but the volume afterwards was too much of a coincidence. I was targeted."
Trading personal information for marketing purposes is nothing new, but as e-commerce becomes a way of life for millions of consumers, privacy concerns are a hot topic.
But findings in a recently released survey, "Public Records and the Responsible Use of Information," sponsored by Alpharetta-based ChoicePoint Inc., indicate that many are in favor of information sharing, so long as it is between the right parties.
Regulating privacy
Most B2B and B2C companies, such as United Parcel Service Inc., are taking these concerns seriously, appointing chief privacy officers to monitor and regulate the flow of information. On the other hand, some in the data industry consider these concerns to have been overstated and that the worst that will happen is an increase in spam.
"I don't believe there's an Internet privacy `time bomb' in relation to the amount of personal data that's available on the Web, but surveys are showing there's an increasing awareness among the public concerning privacy issues, and that's where a problem may lie," said Mark Lawrence, chief privacy officer for CompuCredit Corp., an Atlanta-based issuer of high-risk consumer credit cards.
Lawrence acknowledged that Web sites do log visitors' addresses, which are often sold to direct marketers, but said that CompuCredit has strict privacy regulations regarding its customers' credit-card details and e-mail addresses.
Privacy is a major issue for ChoicePoint because personal data is the core of its business. The company, which grew out of credit reporting giant Equifax Inc., provides information to insurers and other companies dealing with risk management and fraud protection.
But ChoicePoint's main focus is not on disseminating personal profiles for profit, but to create a more informed and safer society, said Chairman and CEO Derek Smith.
On the consumer level, the company offers SearchPointe, a Web-based service that allows individuals to do background checks on the credentials of medical professionals.
Smith said three key values must be employed to ensure data is not abused. Clear guidelines must be established to determine what information should be made available and that it is used responsibly and appropriately, he said.
Furthermore, consumers should be notified, whenever possible and practical, as to the use of that information, ideally before it is used, he added.
And that information must be ascertained to be accurate, and consumers should be allowed to review and update their data as they are able to do with their credit reports, he said.
Trust as an asset
With 1.5 million customers, deliveries to over 6 million locations, and handling an estimated 13 million packages per day, UPS has one of the largest B2B customer bases, which would be a major mining resource for marketers, but all information remains confidential, said Steve Torbett, e-commerce marketing director.
"We recognize that the trust aspect of our brand is probably one of our most important assets, and the security and privacy around the commerce and trade information we collect from customers is critical," he said. "We are extremely cautious about how we enable access to that information."
UPS's tracking systems, although open to customers, are secure, he added.
"There's a more advanced level of information called signature tracking, which provides delivery address information as well as the signature image of the person who received the package, and the c.o.d. amount of the package if that is applicable," he said. "That's obviously more sensitive information, and if someone accessed the delivery address, they could generate their own customer lists."
The company's policy is to balance ease of access to information with providing security, Torbett said.
Numerous companies have adopted regulatory seals such as those offered by BBBOnLine.com, a subsidiary of the Council of Better Business Bureaus, but Smith said it is essential companies police themselves.
ChoicePoint has a special committee composed of board members who watch to ensure the company uses information responsibly, he said.
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