Data Security

“Privacy concerns are one of the major obstacles for the next level of adoption of the Web by online customers,” says Terry Golesworthy, president of The Customer Respect Group, a research and consulting firm. The company recently analyzed 464 major corporate Web sites to determine critical trends related to online customer privacy, and then ranked those companies. Here’s what it found: ¥ 23 percent of companies have policies that The Customer Respect Group termed “good” for allowing users to destroy their own information stored in corporate databases. ¥ 42 percent of companies scored”good” on their policies toward sharing of collected personal data. ¥ 64

Here’s a nightmare scenario: One Monday morning you look at the previous week’s sales numbers from your online channel, and your heart skips a beat. Sales were up 23 percent! Hooray! But within a few days your contact center starts getting calls from irate consumers wondering why you’ve charged their credit cards for items they never ordered. Your site has been tagged by Internet fraudsters using stolen credit card numbers. How could you have avoided this? By instituting fraud-detection best practices. Here are a few offered in the white paper”Buyers Guide: Best Practices for Internet Fraud Prevention,” available from ClearCommerce, a software solutions provider (www.clearcommerce.com). ¥

Cybercriminals broke into the computer systems at BJ’s Wholesale Club and and stole customer data. As a result, BJ’s faces about $13 million in private claims. And in its settlement with the Federal Trade Commission, BJ’s must submit to outside security audits for the next 20 years. Fraud costs the retail industry an estimated $1.5 billion annually, according to the National Retail Federation. Think technology will come to your rescue? Think again. In 2004, the Carnegie Mellon University CERT Coordination Center tracked 3,780 new computer security vulnerabilities, up from just 171 in 1995. The problem is getting worse, even with all of the

Seventy-five percent of consumers believe they have lost all control over how personal information is collected and used by companies, according to a recent Privacy& American Business survey, said James Koenig, co-leader of privacy practice for PricewaterhouseCoopers, in his session”Marketing in a Privacy-Sensitive World” at Direct Marketing Days New York held last month. Following are a few tips Koenig offered to manage internal communication to better protect your customers’ data: * Implement a marketing oversight management process. “All marketing programs and campaigns should be reviewed quarterly,” said Koenig. Representatives from each distribution channel should be included. The process should be used as a tool to reinforce

If you gather employees’ personal information from credit reports you now are required to destroy the data before discarding of it, according to regulations that went into effect earlier this month. The Fair and Accurate Credit Transactions Act, which was passed by Congress is December 2003, states that employers must shred or burn paper documents or “smash or wipe” computer disks that have the employees’ information. This refers only to data you’ve collected on employees by running credit reports on them. According to a report in USA Today (“Employers must shred personal data,” June 1, 2005), the regulations are part of governmental efforts to reduce identity

A federal bill recently introduced in the U.S. Senate by Diane Feinstein (D-Calif.) would require any institution that owns, licenses or collects personal information to notify the individuals to whom the information belongs if those data are believed to have been acquired by an unauthorized person. Given both the recent flurry of this type of legislation and data breaches at a number of institutions in recent months, Jerry Cerasale, senior vice president of government affairs for The Direct Marketing Association, offered the following advice at his session “Legislation and Privacy Issues: Protect Your Company and Manage Your Risk” at the Annual Catalog Conference held last

Twenty-seven percent of consumers say a trusted online merchant should never share their personal customer information with a third party without the consumer’s express permission, according to “The Online Consumer Permissions Study,” a research report released by the Ponemon Institute earlier this year. In all, 1,799 consumers age 18 and older were surveyed. Other findings include: * 89% of consumers would approve of information sharing without their permission to improve the quality of services or products offered. * 84% to helped reduce incidents of identity theft. * 71% to conduct research that helps a company better understand its customers’ preferences. * 62% to provide product information or special

Be afraid. Be very afraid. As you read this, hackers are scanning your servers for open ports. Or perhaps at this moment a hacker is pasting odd strings into your catalog request form to steal credit card numbers. Worse yet: Your machines might already be compromised — and you don’t even know it. Yes, my intent is to scare. And yes, I sound paranoid. But I’m actually not. As one security expert told me with no trace of humor, “It’s not paranoia when they really are trying to get you.” As a multichannel merchant, your days should be spent worrying about merchandise, customer

Many merchants still haven’t adequately protected their customers’ data from falling into the wrong hands, said Joe Majka, vice president at VISA USA, during his talk at the conference of the eCommerce and Catalog Systems Forum, held March 3 and 4 in New Orleans. In his work with merchants, Majka says he still finds many merchants guilty of the following: ¥ No segmentation and/or firewall installed on networks. “Thieves can get into a merchant’s system and go anywhere they want to within that data network,” Majka said. ¥ Un-patched systems and/or default configuration.”I often see merchants who haven’t changed the default password that comes

Three-quarters of information technology (IT) managers said their companies are not adequately protected from, or able to prevent, computer virus attacks. Here’s what else the study from solutions provider SupportSoft found: ¥ 86% of IT managers said not all of their companies’ computer systems are updated with software patches when initially distributed. ¥ 74% said their companies are hit monthly with one or more computer viruses. ¥ 86% said their No. 1 fear is the loss of employee productivity when their companies are hit with computer viruses. ¥ 71% said unauthorized programs such as spyware and malware are major concerns and increase IT help