Data Security

Traditionally, data security has been a back-office risk management concern. Today, whether you’re marketing to consumers or businesses, security is a top-of-mind concern that can differentiate your product or service from the competition. Breach notification laws such as California S.B. 1386 have ensured a steady stream of headlines over the last year, and consumers and businesses have begun to take note. According to the “2005 EDS Financial Services Privacy and Customer Relationship Management Survey,” 59 percent of consumers said financial institutions could further gain their trust by providing ongoing information on measures taken to improve security. What if you aren’t a financial institution? The Conference Board

Identity theft represented 37 percent of all fraud complaints filed in 2005, according to a report released by the Federal Trade Commission (FTC). Credit card fraud was the most common form of reported identity theft, and 46 percent of all complaints were Internet-related, noted the agency. Other top fraud categories included: ¥ Shop-at-home/catalog sales: 8 percent ¥ Prizes, sweepstakes and lotteries: 7 percent ¥ Internet services and computer complaints: 5 percent Source: The FTC’s “Consumer Fraud and Identity Theft Complaint Data” report, http://www.consumer.gov/sentinel/pubs/top10fraud2005.pdf

The security of your customers’ and employees’ personal data isn’t something to take lightly these days, so take the time to re-evaluate your security measures in the new year. Consider the following security guidelines for controlling access to information residing on data storage devices, offered by online nonprofit privacy organization TRUSTe in its recently revised white paper “TRUSTe Security Guidelines 2.0.” 1. Use a unique identification or user name for all system users. Ensure that Social Security or account numbers aren’t used as identification or user names. 2. Establish a password usage policy. This policy should require employees to create passwords using a minimum

The ongoing threats of spam, identity theft and data security breaches hang heavily in the air at the close of 2005. Headlines detailing these dangers have made sure your customers are more aware than ever of the perils of buying online. In fact, 48 percent of Americans avoid making purchases on the Internet because they’re afraid their financial information may be stolen, according to a survey conducted earlier this year by the Cyber Security Industry Alliance. So what’s a responsible online merchant to do? Following are tips to not only ensure your Web site adequately handles customers’ data, but also make it undeniably

The number of worldwide computer virus infections jumped 22 percent from Q1 to Q2 this year, according to the recently released “Trend Micro Q2 Virus Roundup.” Other data revealed by the study: ¥ North America leads the world in infections, with 6.2 million reported in Q2. ¥ Asia comes in a distant second, with about 2 million reported infections in Q2. ¥ Europe reported 1.8 million infections in Q2. ¥ Worldwide infections were down 16 percent from Q1 2004 to Q1 2005. Source: “Trend Micro Q2 Virus Roundup,” http://www.trendmicro.com/en/security/white-papers/overview.htm.

Consumers who’ve been notified that their personally identifiable information (PII) had been compromised are more than upset -- 59 percent of them either consider terminating or actually terminate their relationships with the offending corporations, according to a new consumer study sponsored by law firm White& Case. The survey, conducted by the respected privacy research organization Ponemon Institute, asked 10,000 adults what actions they took after their PII was mishandled: ¥ 58 percent said the breach decreased their sense of trust and confidence in the organization reporting the incident; ¥ 52 percent said the breach notices they received were difficult to understand; ¥ 40 percent

Are your contact center reps treating your customers in a way that best represents your brand? Are they staying within the confines of applicable laws when making upsell and cross-sell offers, especially those for third parties? Are you sure? Here’s why I ask: I ordered a home product from a catalog in July. I had previously ordered from this company with no problems. After taking my order, the contact center rep launched into a rambling, barely decipherable cross-sell offer of joining some third-party shopping club in which I could get discounts on other products not related to the catalog. I

“Privacy concerns are one of the major obstacles for the next level of adoption of the Web by online customers,” says Terry Golesworthy, president of The Customer Respect Group, a research and consulting firm. The company recently analyzed 464 major corporate Web sites to determine critical trends related to online customer privacy, and then ranked those companies. Here’s what it found: ¥ 23 percent of companies have policies that The Customer Respect Group termed “good” for allowing users to destroy their own information stored in corporate databases. ¥ 42 percent of companies scored”good” on their policies toward sharing of collected personal data. ¥ 64

Here’s a nightmare scenario: One Monday morning you look at the previous week’s sales numbers from your online channel, and your heart skips a beat. Sales were up 23 percent! Hooray! But within a few days your contact center starts getting calls from irate consumers wondering why you’ve charged their credit cards for items they never ordered. Your site has been tagged by Internet fraudsters using stolen credit card numbers. How could you have avoided this? By instituting fraud-detection best practices. Here are a few offered in the white paper”Buyers Guide: Best Practices for Internet Fraud Prevention,” available from ClearCommerce, a software solutions provider (www.clearcommerce.com). ¥

Cybercriminals broke into the computer systems at BJ’s Wholesale Club and and stole customer data. As a result, BJ’s faces about $13 million in private claims. And in its settlement with the Federal Trade Commission, BJ’s must submit to outside security audits for the next 20 years. Fraud costs the retail industry an estimated $1.5 billion annually, according to the National Retail Federation. Think technology will come to your rescue? Think again. In 2004, the Carnegie Mellon University CERT Coordination Center tracked 3,780 new computer security vulnerabilities, up from just 171 in 1995. The problem is getting worse, even with all of the