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Money Management (Distributed by the New Jersey Society of Certified Public Accountants)

Protect Customer Data with a Privacy Policy


As the Internet becomes a prime resource for buying products and services and for conducting financial transactions, there is growing concern about how companies collect, share and sell customer information. In particular, consumers want to be sure the information they provide via a website will not be used by unauthorized third parties.
Companies that conduct business on the Internet are advised by the New Jersey Society of Certified Public Accountants (NJSCPA) to take steps to assure customers that their privacy will be respected. A clearly written and prominently posted Internet privacy policy can alleviate fears, instill a climate of trust and encourage visitors to feel comfortable doing business with you.

Why Have a Privacy Policy?
Some websites collect detailed information in order to provide customized, targeted shopping experiences or to permit one-click shopping. Other sites collect email addresses for future promotions and mailings. A privacy policy establishes clear expectations by explaining to visitors exactly what information is being collected. This includes information entered directly by the visitor, such as email addresses, as well as the use of technologies, such as cookies, that track data not explicitly provided by the user. When customers understand how their information is going to be used and protected, they can make informed decisions about how much to disclose.

What Should a Privacy Policy Include?
A good privacy policy should answer questions any consumer visiting your site is likely to ask. For example: What kind of personal data do you collect? Are individuals aware that their personal data is being collected? Is personal data disclosed to third parties, and if so, how and why? Do you allow third-party advertisers to place banner ads and send cookies to your customers? Are there procedures that allow site visitors to find out what information you have gathered about them? Do you make it easy for visitors and customers to opt-out or unsubscribe from any lists you maintain?
What security measures are in place to protect customer and visitor data from loss or misuse?

How Do You Create a Privacy Policy?
In creating a privacy policy, you may be tempted to look on the Internet for a policy that sounds workable and post it, or something similar, on your site. Don't. Privacy policies differ significantly, depending on the company's activities, the nature of the information it collects, and how it uses or shares that information. Your privacy policy should be the outcome of an extensive internal review of your company's data collection practices that examines the value of the information it collects and evaluates how that data is maintained and protected.
Meet with everyone in your company who touches customer data and ask specific questions about the type of information they need, where they get it, and how they use it. Conducting your analysis from the customer's perspective will help you create a policy that protects consumers' data and allows your company to carry out its business functions.
Write your policy in clear, understandable language and, for easy access, post a link to it on every page. Be sure to share your privacy policy with everyone in the company and explain the importance of complying with its guidelines.

A Certified Public Accountant (CPA) Can Help
Protecting customers' privacy is essential in today's business environment. Keep in mind that privacy is not the same as security. To further alleviate customer concerns about conducting business on your website, be sure company privacy statements are supported by security statements, indicating the technology used to protect consumer information. If you need advice in these areas, consult a CPA. If you don't have a CPA, you can easily locate one online using the NJSCPA Find-A-CPA service. Just go to www.findacpa.org and in a few clicks, you can locate a highly qualified professional who is right for you.


If you would like to receive more information on various financial matters, subscribe to E-CPA, the NJSCPA's free, monthly email newsletter. To subscribe, visit www.njscpa.org/finances or email a subscription request to e-cpa@njscpa.org.

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Money Management is a weekly column on personal finance distributed by the NJSCPA.

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