Privacy woes scaring off e-shoppers

Sixty-one percent of the Internet users that don't shop online cite privacy and security concerns as the reason.
Written by Robert Lemos, Contributor
WASHINGTON -- A national survey released at the Global Privacy Summit here Wednesday found that privacy concerns are having a significant impact on e-commerce.

Of the 800 people surveyed, more than 61 percent of the Internet users that don't shop online cite privacy and security concerns as the reason.

"(Businesses) think of privacy as some sort of product that you can sell," said Gary Clayton, the CEO of Privacy Council Inc., who -- with privacy service provider Privista -- funded the survey. "It's not; it's a process of getting the consumer's trust."

The survey found that 46 percent of consumers thought that guaranteeing the privacy of their information is an extremely important part of building trust between a business and consumer.

That topped all other considerations, including satisfaction guaranteed (39 percent), a consumer hotline for complaints (34 percent), and discounts and services for loyal customers (19 percent).

Not cutting it While 84 percent of those polled wanted to be informed of a site's privacy policies in easily understandable language, other data -- from online retailer AmericanGreetings.com -- shows that current privacy policies are not cutting it.

'(Businesses) think of privacy as some sort of product that you can sell. It's not; it's a process of getting the consumer's trust.'
-- Gary Clayton, CEO of Privacy Council Inc.

Several speakers at the Global Privacy summit agreed.

"Privacy policies are just not being read," said Larry Poneman, a partner at Big 5 auditor PricewaterhouseCoopers, during a panel discussion. "I don't even know what ours says."

Gary Laden, the director of the privacy program for the Better Business Bureau Online, also thought privacy statements on today's Web sites aren't enough. "The readability issue is an enormous problem," he said.

The survey's reaffirmation of the importance comes at a time when the industry continues to get battered by privacy advocates for not keeping citizen's best interests at heart.

Amazon.com slammed Two groups advocating greater personal privacy severed ties to Amazon.com on Wednesday after the online retailer revamped its privacy policy last week to allow the transfer of customers' data in the event that the company is sold.

Both the Electronic Privacy Information Center and Junkbusters Corp. released statements that stressed their disapproval of the move and terminated their involvement in the Amazon.com affiliate program.

"Because Amazon announced that it could no longer guarantee that it would not disclose customer information to third parties, and in the absence of legal or technical means to assure privacy for Amazon customers, we have decided that we can no longer continue our relationship with Amazon," said Marc Rotenberg, executive director of EPIC in a letter that went out over the Internet.

Moreover, Robert Moran, vice president of pollster Fabrizio McLaughlin & Associates and author of the survey, admitted, "Industry could do a better job at stepping up to the plate on these issues."

Despite consumers' apparent concern, however, Moran found that overall, they trusted e-commerce companies -- with the average person giving businesses a "B" for their privacy efforts.

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