Privacy Under Scrutiny

Consumers are nervous about how much of their information is readily available to anyone who knows how to access it.

We’re not talking just about identity theft, which is a criminal offense, but about legal marketing practices. Indeed, consumers are being deluged with direct marketing offers pitched at them by mail, e-mail and telephone. Think about it from their viewpoint. While you think you’re helping consumers by making just-in-time offers to satisfy their needs and desires, they’re thinking: “Whoa! Can we get a little privacy over here?”

Just how much do consumers care about this issue? A lot. For example, 69 percent of adults agree that consumers have lost all control over how their personal information is collected and used by companies, according to a Harris Interactive poll of 1,010 adults conducted by phone in February. While this is down from 80 percent in 1999, it’s still more than two-thirds of American adults feeling their personal information is no longer in their control.

Moreover, 54 percent of adults disagree with the statement “Most businesses handle personal information they collect about consumers in a proper and confidential way.” This is up from 35 percent in 1999.

Indeed, one observer has noted that privacy will be to this generation what the civil rights and women’s liberation movements were to previous generations. That is, we’re witnessing the dawn of a new social awareness: People are beginning to understand how vulnerable their personal information has become in this networked world.

So what do you, as a cataloger, need to know about this issue of consumer privacy? First, that the Federal Trade Commission (FTC) has already signaled its intent to uphold current privacy regulations. And make no mistake: Marketing practices are under scrutiny.

For example, in February Hershey Direct and Mrs. Fields Cookies incurred civil fines for violating the Children’s Online Privacy Protection Act. FTC officials cited the merchants for collecting personally identifiable information (PII) from children online without first getting the proper parental consent. Mrs. Fields had to dish out $100,000, and Hershey Direct, $85,000. The separate settlements bar the companies from violating the rule in the future (translation: they’re now on the FTC’s radar screen).