By Paul Bates, UK MD, StrongMail Systems.
Recently a number of companies, Play.com, E-ON and T-Mobile, have faced serious security breaches with their customer data. For example, thousands of T-Mobile customers received cold calls offering them new mobile phone contracts.
Nothing out of the ordinary there, except that the caller knew that their contracts were about to expire. It later transpired that members of the firm’s staff had sold customer data to other phone firms.
While a wider argument will be whether such offences should carry a custodial sentence, these events bring into sharper focus the question: how safe is your data in the places where you have entrusted it? When it comes to email marketing, there remains significant cause for concern.
A survey in 2008 by StrongMail Systems and Ponemon Institute, a privacy and information management research firm, found significant gaps in perceptions between marketers and privacy professionals in terms of how email marketing practices affect consumers' privacy rights and risks to personal information.
The perception gap between marketers and privacy professionals is made evident in the compiled report "Study on Email Marketing Practices and Privacy." According to the study, more than one-third of marketers do not limit the data they distribute to third parties, whereas 75% of privacy professionals believe that their organisations limit the data it shares.
In fact, marketers report a willingness to share such personal information as credit card numbers (45%), debit card numbers (39%) and bank account numbers (17%).
The report also found that while 59% percent of marketers and 53% of privacy professionals indicate that they outsource marketing activities, almost half of the organisations that experienced a data breach - for example the recent issues experienced at T-Mobile - pinpointed the loss of data to a third party, such as a vendor, business partner or contractor.
Of marketers who outsource email marketing, a third (28%) are more likely to report a data breach. In addition to potential data breaches, outsourcing also limits an organisation's ability to safeguard consumer data to ensure that it is not used for other unintended purposes, such as unsolicited spam or phishing attempts.
It appears, therefore, that privacy professionals and marketers have starkly contrasting perceptions about the value of privacy and trust to their email marketing programmes.
This should serve as a wake-up call to the industry to ensure better alignment between the expectations of marketers and privacy professionals when it comes to respecting and protecting customer data.
The huge discrepancy between what customer information these two groups will share shows that many marketers view customer data as more of a commodity than an asset – and that willingness to violate the trust of their customers can have a disastrous affect in terms of customer loyalty.
Until customer information is handled as intellectual property, the data security breaches we have seen this week are almost certain to reoccur.
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