• March 30, 2012
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

FTC Pushes for Greater Consumer Protections

A month after the Obama Administration unveiled what it called the blueprint for a consumer privacy bill of rights, the Federal Trade Commission released its own report, which contains the same recommendations for businesses to protect the privacy of American consumers and give them greater control over the collection and use of their personal information.

In the report, "Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers," which the FTC released March 27, the agency called on companies handling consumer data to implement the following recommendations for protecting privacy:

  • Privacy by Design—companies should build in consumers' privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy;
  • Simplified Choice for Businesses and Consumers—companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple way for consumers to control the tracking of their online activities.
  • Greater Transparency—companies should disclose details about their collection and use of consumers' information, and provide consumers access to the data collected about them.

"If companies adopt our final recommendations for best practices—and many of them already have—they will be able to innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy," said Jon Leibowitz, chairman of the FTC, in a statement. "We are confident that consumers will have an easy-to-use and effective do not track option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don't."

The final report amends a previous document that the FTC put forth in December 2010. The preliminary report applied the standards to all commercial entities that collect or use consumer data. The new report exempts companies that collect and do not transfer non-sensitive data from fewer than 5,000 consumers a year.

The report also urged companies to adhere to accepted "do-not-track" standards for Web traffic and to adopt greater protections for consumers who use mobile phones. It also called on data brokers to make their operations more transparent by creating a centralized Web site to identify themselves, disclose how they collect and use consumer data, and detail the choices they provide consumers.

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