Privacy matters … 5 useful tips

In today’s electronic environment it is rare to find a business without a customer/client database … and the value of such crucial business tools is increasing.  It is in this electronic environment that privacy now seems to matter a great deal to the average New Zealander.  What does this mean for you and your business?  Here are 5 useful tips.  

Up until now there has been a tendency for businesses to dismiss privacy as PC nonsense and even a hindrance to getting on with business.  However, there is now proof, in a survey conducted on behalf of the Privacy Commission, that an astonishing 93% of representative New Zealanders think that, particularly in relation to the handling of information by businesses, respect for and protection of personal information is important. 

While it may still be true that many of the compliance benefits to business are intangible, for example goodwill and reputation, at the end of the day these things can make or break your business.  So if it is important to your customers, then it is important to your business.  You do not want to find yourself in the same situation as a US firm, the lead news item on the 6 o’clock news for violating their customer’s privacy. 

A prominent online advertising company had anonymously profiled their customers in an online survey.  They later thought it would be useful to match some of that information with information held by an associated company.  There was a backlash amongst their customers, law suits followed along with loads of negative media attention.  The Company paid nearly US$2 million in legal costs plus a loss in share value when it came to sell some four years later.

In New Zealand, our privacy law, set out in the Privacy Act, is targeted at protecting people’s personal information.  The legal principles are not directly enforceable by the Courts, meaning you cannot be sued for breaching a principle, but the law provides for complaint procedures that can be escalated to the Human Rights Review Tribunal or Courts if not settled amicably between the parties. 

The following are 5 useful tips for avoiding a privacy complaint:

1. When you ask clients or customers for personal information be open about why you want it.  You should do this also for employees.  This way they are less likely to object to you using the information when you do.  And do not use the information for purposes other than those you intended and communicated when collecting it.
2. Tell people if you intend to pass their information to others and, if appropriate, why.  Again, this makes it less likely that people will object to you using their information when you do. 
3. If someone wants you to show them the information you have about them, show them. 
4. Do not collect more information than is necessary for your purpose.  And make sure it is stored securely.  This can be costly.  Do not collect and store more than you need to.  Also, the more you have the more you have to keep updated – which is also a requirement under the legislation.
5. Make sure the information is current and correct before you use it because people are quick to complain if they think that you have used wrong information. 

Aside from complaint avenues and penalties provided for in the law including monetary penalties which may be substantial depending on the circumstances, there are some intangible but potentially more damaging effects including brand damage.  A mishandling of client/customer information can damage the business relationship and hard earned reputation that you have spent time and resource developing.  For further information regarding complying with privacy laws go to www.privacy.org.nz or talk to your professional advisor.