Is Your Online Business In Danger of Privacy Violations?

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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In case you haven't noticed, online privacy has become a hotbed of controversy. For example, Facebook's recent privacy debacle centers around the fact that users are tracked even after they're logged out of Facebook. A 24-year old law student in Austria even found that Facebook was storing data that he had previously deleted. And Facebook is not alone in growing concern over privacy. Google has had its share of controversy recently, too.

Web companies continue to push the boundaries of what information they can keep and redistribute of their users. It's become commonplace for sites to pull as much information as they possibly can out of each user.

Not surprisingly, Washington is getting more involved in the privacy debate. Techcrunch has a recent article on the head of the Director of the Bureau of Consumer Protection putting a major emphasis on online consumer data protection. There's even a "Do Not Track" bill (similar to the Do Not Call registry created in 2003) that was introduced last February.

Online privacy for consumers is starting to reach a boiling-over point. I personally won't go around wearing my tin-foil hat just yet, but the amount of data that is available and being collected by some sites is scary. A great illustration of this fear—just in time for the Halloween season—is the Take this Lollipop site.

Now, I'd wager that your website is probably not pulling in or storing as much data as Google or Facebook. But here's a quick overview that you can take to make sure you're playing within the government's rulebook.

Make a Privacy Policy

Your website does have a privacy policy, right? If not, you can hire a lawyer or use one of the W3C P3P-approved software to generate one.

One thing that that can be helpful for users is a human-written, non-legalese paragraph at the top explaining your core privacy values. Take the first paragraph of your privacy policy and outline the core concepts. Nobody really wants to dig through the legal jargon (except your lawyers, maybe?), so make it easy on everyone else.

Automattic—the company behind Wordpress.com—has a great privacy policy that takes the first fold of the page and explains the core values of the company concerning user privacy.

Not only that, they've open sourced their privacy policy for anyone who wants to modify and reuse it. Generous and helpful.

Users want to be reassured that you're not scamming them. Adding a privacy policy helps, but adding a bit of text beforehand simply explaining the policy and your core values can go a long way to making users feel comfortable.

Get Certified

The best way to make sure that you're following the proper protocols is to get certified. Truste is a service that audits commercial and enterprise websites to make sure they're falling in line with privacy and data collection practices. It's a paid service, but adding a Truste seal to your site can drive conversions, too. (Gaining a customer's trust can be a great help in improving conversions and shopping cart bounce rates.)

There's also a few other certifications that are worth checking:

• Control Scan PCI Complancy. PCI compliancy is a must if you're storing credit card numbers.
• McAfee. McAfee offers products that scan for site vulnerabilities as well as PCI compliancy certifications.
• Trust Guard
• Better Business Bureau

Online Privacy Resources

Becasue your first defense is education, here are some resources to make sure that you're not in the dark about online privacy.

The Bureau of Consumer Protection Business Center: While it's not a very fun afternoon, you should check out some of the resources that detail online privacy issues. The Bureau of Consumer Protection Business Center is a great place to start, with it's detailed discussion of privacy issues.

Epic.org: Epic is a public internet research group founded in 1994 to focus on civil liberties issues related to online privacy. A quick pass at their privacy issues page gives some of the recent hot-button issues that are irking the public.

Get more business insights from Glen at LifeDev