Private is as private does!

Can a company’s privacy policy affect its business?

A company’s privacy policy is a statement of the “value” it places in its customer relationships. Perhaps the first reflection of that is in the value it places on their “property” – in this case personal information. This simple thing can help build trust that is critical to any relationship.

However, trust is a fragile commodity and once broken it can seldom, if ever, be regained. Consequently, not only should you ascertain the “proper” use of customer information but also ensure that all perceptions related to this issue are handled correctly.

An organization’s actions rather than words are sometimes a better reflection of its real intent. Most customers are intelligent enough to distinguish between politically correct “lip service” and sincere action. In order to sustain a customer’s trust in a company the latter must support its policy with concrete action. Over time, a company must embed privacy in its business processes and establish roles and responsibilities to ensure compliance. Remember, to a customer, this is an issue that showcases the company’s beliefs and core values.

One must be aware of the legal implications of abusing a consumer’s privacy. Since the Freedom of Information Act of 1970, there have been many laws passed by congress to protect the privacy of individuals. Here are some of the recent laws (by no means is this list exhaustive):

· Fair credit reporting act, 1970

· Privacy Act, 1974

· Right to Financial Privacy Act, 1978

· Federal Internet Privacy Protection Act of 1997

· Communications Privacy and Consumer Empowerment Act of 1997

· Data Privacy Act of 1997

· Financial Services Modernization Act of 1999

Consequently, every company must take steps to ensure the privacy of visitors to its web site. Here are some things that a company can do to ensure both compliance with the law and maintaining the trust of its customers.

• Privacy:

• Request information that is absolutely necessary. For example, using Social Security numbers as customer id is NOT a good idea

• Protect information at all times. Do you have security strategy, processes and infrastructure in place to prevent the theft of customer information?

• Disseminate collected information carefully. Is the information treated on a strictly “need to know” basis even among company employees? Is this information sold or shared with external sources?

• Accuracy:

• Ensure accuracy of information disseminated. Is the information correct and consistent across sources and data stores?

• Update information periodically. Are there processes in place to update this information periodically?

• Property:

• Clearly establish and communicate the ownership of information. This is a gray area and must be handled with care.

• Clearly establish and communicate the ownership intellectual property rights.

• Access:

• Provide uniform access to information without consideration. It is a smart policy not to charge for a person to access their own information.

• Clearly establish and communicate the means of information access. However, ensure that the privacy is not compromised when using one of these means.

• Provide means of updating/changing information

• Provide mechanism to challenge information content

• Provide equitable means of conflict resolution

• Notice:

• Clearly notify consumers of policies and practices as they relate to privacy of personal information

• Periodically review and update these policies.

• Consent: Clearly obtain consumer’s consent prior to disseminating information about them.

A company’s privacy policy might not sell a product but it sure prevents one from being sold. Over time a perception builds in the marketplace that can and does destroy brands.

Sourabh Hajela

Sourabh Hajela is a management consultant and trainer with over 17 years of experience creating shareholder value for his Fortune 50 clients. His consulting practice is focused on IT Strategy – alignment and ROI. For more information, please visit Please feel free to contact him at or post your questions at

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Posted on 06/04/2009 by

Private is as private does! author sourabhhajela



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