Why companies should worry about sharing customer information

The CRTC will likely take notice of a new survey released last week by the Public Interest Advocacy Centre that shows Canadians disapprove of having their customer data shared among corporate affiliates or unaffiliated third parties. It’s an issue that is currently before the commission (NL, Dec. 20/00), and has been raised by ISPs as a serious competitive concern (see in this issue). The executive summary of the Industry Canada-funded survey is highlighted below. This study sheds light on how the general public defines and views issues around obtaining their consent. Overall, the findings reinforce the importance of obtaining meaningful consent from consumers to the collection, use or disclosure of individual consumer information for secondary marketing purposes, whether internal, among affiliates, or involving third parties. In broad terms, this study points to six conclusions that hopefully will provide guidance to policy makers facing the challenges of implementing aspects of Bill C-6. 1. Businesses cannot assume anything about consumer consent to secondary marketing. Attitudes vary widely among Canadians. While many do not mind, and in some cases even like, such practices, a significant proportion are not comfortable with companies using their personal information for the purpose of secondary marketing (38%). An even higher proportion of people (48%) object to the sharing of this information with affiliates. Moreover, most Canadians are unaware of the extent to which companies collect, use and disclose their personal information for commercial purposes. For example, 54% of those participating in loyalty programs are unaware of the fact that such programs commonly collect and use their purchasing information for marketing purposes. Clearly, consumers cannot consent to practices of which they are unaware. 2. Canadians express high levels of concern about unsolicited direct marketing, and particularly about telemarketing. Close to three in four Canadians (74%) are at least moderately concerned about the amount of uninvited personalized marketing material they receive. Telemarketing is a particular sore point, with a clear majority (61%) reporting a preference toward stopping all telemarketing calls to their household even if it means that they miss out on a really good opportunity. 3. Canadians want control over the collection, use and disclosure of their personal information by businesses for marketing purposes. A sizeable majority (82%) of Canadians report that businesses should obtain their permission before using their information for further marketing purposes. Obtaining consent is considered even more important when the information is to be shared with an affiliate. More than eight in ten (84%) Canadians feel that it is important that telephone companies obtain their consent before information can be shared within their corporate family. This number increases to 87% for banks. 4. A clear majority of Canadians do not want businesses to assume their consent to further marketing. Overall, 69% of Canadians do not consider opt-out approaches to be acceptable. Rather, they want to be asked explicitly for their consent if a company wants to use their personal information for marketing purposes. 5. Despite a preference for opt-in approach, opt-out approaches to consent for marketing purposes are considered acceptable in certain circumstances. However, acceptance is highly conditional. More than four in five respondents (82%) consider it highly important that the opportunity to opt-out is brought to their attention, with a sizeable 88% reporting that the opt-out process should be clear and easy for them to execute. 6. In practice, however, examples of the way that businesses have used the opt-out approach fall short of consumer desires/demands, pointing to a need for improvements. Focus group testing of various business forms, which included opt-out provisions, indicated high levels of concern about the failure of businesses to bring this information to the attention of consumers. Lack of sufficient clarity and/or detail about the business practices in question, inconspicuousness of the opt-out opportunity, and potential difficulties in exercising the opt-out were examples of problematic approaches. For more information, visit www.piac.ca.

Why companies should worry about sharing customer information

News | 09/11/2001 4:00 am EDT

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