Consumer’s Privacy

Consumer right also relates to privacy, information, data banks, and similar emerging issues. Consumer information collected, merged and exchanged through computer and communications technologies has become the main resources that business and government use to facilitate the millions of daily transactions engaged in by consumers. Timely, accurate and complete consumer information is needed by variety of organizations such as banks, retailers, commercial lenders, mortgage lenders, financial services organizations direct response marketers, advertising agencies, insurance companies, and public utilities. The purposes for consumer information may include things such as approving or denying credit, issuing credit cards, writing insurance policies, selecting people for direct mail solicitation preventing fraud, determining eligibility for government aid, investigating and law enforcement purposes and many other activities.
To obtain the benefits of technology without losing basic privacy rights, the United States moved in the early 1970s to formulate six basic computer age privacy rules:
1) Only relevant and socially approved personal information should be collected by private or public organizations to determine people’s access to rights, benefits and opportunities.
2) Individuals should be informed what information about them is to be collected and how it will be used.
3) Individuals should have practical procedures for inspecting their records and for raising issues as to the accuracy, completeness and propriety of information used to make evaluative decisions about them.
4) Sensitive personal information should be circulated within the collecting organizations only to those with a need to see it for legitimate purposes.
5) Disclosures of identified personal information should not be made by collecting organizations to others outside the original area of activity unless agreed to by the individual or required by legal process.
6) Organizations must create and apply effective data security measures so that they can keep the promise of confidentiality that they have made to individuals whose information they are holding in a trustee relationship.
But new consumer privacy issues have surfaced recently. For instance,
1) Featured stories in magazines, newspaper and on TV informed the public that information given for any one purpose – credit , insurance, employment, organizational memberships, publication, subscriptions, charitable donations etc – was being widely used for other commercial purposes without the individual ’s knowledge or consent.
2) When the Society of Consumers Affairs Professionals in industry pooled ten leading consumer advocacy organizations in 1989 as to the issues they believed would be consumer action priorities in the 90s, a majority cited better consumer privacy protection.
3) President Bush’s Special advisor for consumer affairs announced a major initiative to see that American consumers and employees enjoyed enforceable rights to privacy requiring three basic steps – creation of effective rules and procedures by business and employers, better consumer education as to rights and some additional laws and regulations.
A major survey of consumers and industry leaders in the privacy intensive sector (e.g. banks and thrifts, insurance companies, direct marketers, credit bureaus etc.) made the following conclusions regarding consumer privacy in the information age.
1) The general concern over threats to privacy by 79 per cent of the public reflects the low trust in institutions that has become a hallmark of contemporary American society.
2) Despite these high general concerns over privacy invasion the public is prepared to provide personal information for consumer services when convinced that fair information practices are observed.
3) Concern about privacy varies by race, religion, political philosophy, information level, age and computer use. For instance, blacks, Jews, liberals and those aged 30 – 49 are most pro-privacy.
4) Lowering general public concern over threats to privacy will not be easy but there are three important ways to enhance consumer privacy interest:
i) Update consumers privacy laws such as the Fair Credit Reporting Act.
ii) Create new information property rights for consumers whereby they could opt in or out of a particular consumer profile information system and receive some kind of compensation if they participate.
iii) Develop more proactive consumer privacy protection policies by business and consumer advocacy groups.
Source: Consumer Behaviour