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FTSE 100 switchboards confused by data protection

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The UK's biggest companies still struggle to deal with basic data protection enquiries, according to a survey of responses.

Though almost all companies have taken some action, the majority are only paying "lip service" to the issue, the report (pdf) said.

Agency Marketing Improvement has carried out previous tests in 2003 and 2005. This third survey questioned 50 companies from the FTSE 100 list of the UK's biggest publicly quoted firms.

It found that though 94 per cent of the companies had adequately notified the Information Commissioner of their processing of information, 60 per cent did not "understand their obligations" because in only 40 per cent of cases did the first point of customer contact, the corporate switchboard, understand what a data protection request was.

The question asked at switchboard level was: "My name and details appear on marketing databases in your corporation. I would like to know whom to speak to so that I can check that the details you hold on me are correct, please." The question was repeated at each destination to which the call was forwarded in each company.

The survey also found that 25 per cent of the surveyed companies had no privacy policy published on their websites. However, Struan Robertson, a technology lawyer with Pinsent Masons, the law firm behind OUT-LAW.COM, said that there was no legal obligation to publish such a policy.

"Users expect to see a privacy policy, and it certainly is recommended for a website, but you don't need one to comply with privacy laws in the UK," said Robertson. "Instead, our laws require that you give certain privacy information wherever a user's personal details are collected, for example on the page where they register for your newsletter."

"It's wrong to conclude from the absence of a privacy policy that a company is failing to comply with data protection laws," he said.

The study said there had been clear improvement in the attitude of major companies to data protection legislation in the four years since the first study, but that companies could do far more in the area.

"Corporations are no longer simply ignoring the law when compared to our earlier studies," said the Marketing Improvement report. "However, we believe that it is fair to say that most are adopting a minimalist approach. We suspect that there are two reasons behind this: firstly, most consumers actually care very little and are easily fobbed off; secondly the downside of breaking the law is minimal."

The report found that just 20 per cent of the companies surveyed have implemented security technology such as the https security standard on their websites when they collect user information.

Though Marketing Improvement says this costs just £500 and the low take up demonstrates how little interest companies have in protecting users' data, Robertson said this is not necessarily the case.

"Companies are required by the Data Protection Act to have adequate technical and organisational measures protecting their data collections," said Robertson. "What is adequate for a website should be gauged by looking at what solutions are available and what they cost. The Data Protection Act goes on to say that you should balance the harm that might result against the nature of the data to be protected.

"If you're taking credit card details through your site, you must secure that collection. If you're taking job applications, you should, and the Information Commissioner has said as much. But if you're taking email addresses through a web form, the level of risk is lower," he said.

"The cost of securing a server is less than it once was. If you can implement https cheaply, it's well worth doing. But that won't be £500 for all sites. Your website might use a content management system that wasn't designed with secure forms in mind. Making that change can cost a lot more than a few hundred pounds."

The report concluded that any failure of companies to deal properly with data protection is counter-productive, because it drives consumers to refuse to participate in marketing programmes.

"We would suggest that the approach currently taken by the UK's largest companies is actually self-defeating," it said. "It diminishes trust in organisations, which is reflected in plummeting response rates and soaring levels of sign up to the telephone and mail preference services.

"Companies may not yet be seeing it in their bottom lines, but consumers are voting with their willingness to listen and accept marketing messages," said the report. "Those businesses that fail to heed this will find their cost of doing business accelerates faster than that of their competition who take these matters seriously."

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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