The Risks of Not Following Data Use Guidelines

If you’re collecting consumer data, make sure consumers understand what may be done with that information, and give them the opportunity to opt-out.

It sounds like a basic concept, but not everyone is transparent to consumers about data practices. When the law catches up to all the advances in data technology, poor practices will leave some marketers vulnerable, said Todd Vare, a partner at the law firm Barnes & Thornburg who specializes in intellectual property , data protection and business dispute cases.

“There is an incredible amount of technology that can gather information and combine it with other information,” said Vare, speaking at LeadsCon Las Vegas on Tuesday. “But the law doesn’t know how to address that.”

In many cases, there is a lot of regulatory guidance available, as well as industry standards. It would be wise to follow them now, so you’re in good shape when the law catches up.

“If you’re not following the guidelines now, you could end up being a guinea pig when the law catches up,” he noted. “You don’t want to be the poster child for new FTC regulations.”

Privacy is a huge issue—47 out of 50 states now have privacy regulations regarding data usage, and worldwide in places like the EU privacy laws are even more restrictive.

There are numerous ways marketers can manipulate and append big data. “It’s incredible what you can do with data today, but he problem is that many consumer opt-ins are relatively narrow,” said Vare. “Most consumers don’t know all the myriad other ways data could be used.”

For example, say someone purchased a deep fryer as a gift for their brother online. If the purchaser’s insurance company were to get that information, they wouldn’t know who the fryer was bought for, and could decide to raise insurance rates because of the related health risk of enjoying fried food.

“It’s a glib analogy, but it can happen,” he said. “Disclose to your consumer how data is going to be used, and get their consent. Do they understand the scope of the opt-in, and do they have the opportunity to opt out?”