Three Reasons Your Website Needs a Privacy Policy

By Daniel D. Whitehouse, Esq. On October 3, 2013 0 Comment

Collecting customer information is often a business necessity. Data collection can lead to operational efficiency, reduced costs, and better quality of services, benefitting both the organization and the customer.

But when an organization collects data through its website, it’s taking on an enormous responsibility. In order to maintain the trust of its customers, and meet legal requirements in some cases, organizations should create and post a website privacy policy.

A privacy policy explains what information will be collected, how it will be collected, how it will be used, with whom you will share it, and how it will be protected. The Federal Trade Commission (FTC) prohibits deceptive practices and requires transparency, so a privacy policy should be written as clearly as possible. Here are three important reasons for developing a privacy policy for your organization’s website.

A Privacy Policy May Be a Legal Requirement

It’s the responsibility of the organization that collects data to understand their legal obligations and act accordingly. Not all information must remain private, but certain types of data are subject to legal protection. For example:

Medical records must be kept confidential, which is increasingly important as healthcare organizations continue to implement electronic recordkeeping systems.
Financial data, especially information pulled from credit reports, must be handled and disposed of according to specific FTC guidelines.
Websites that collect data related to children under the age of 13 must comply with the FTC Children’s Online Privacy Protection Act (COPPA) and keep this data private.

While no federal law exists that requires all business websites and mobile apps to have a privacy policy, states are beginning to enact their own legislation. For example, California has required website privacy policies since 2004, and it has passed legislation that requires privacy policies that disclose how websites respond to “Do Not Track” technology.

Major Online Services Require a Privacy Policy

Google Analytics requires that companies “will have and abide by an appropriate Privacy Policy and will comply with all applicable laws and regulations relating to the collection of information from Visitors.” This privacy policy must be posted and explain how cookies are used to collect traffic data. Bing Webmaster tools have similar requirements. Compliance is mandatory if you want to use these tools.

Your Clients Deserve Privacy Policy Protection

Put yourself in the shoes of your clients. If you were willing to hand over sensitive personal or business information to someone, wouldn’t you want to know how that data was being used and protected? Would you be able to trust someone who was unwilling to offer such an explanation?

The National Security Agency is under fire for secret electronic data collection in the name of national security. However, if there had been greater transparency and people knew certain data was being collected while it was happening, would there have been such outrage? Your clients deserve that transparency for their own peace of mind.

Compromising privacy can have serious legal ramifications, so a privacy policy that is clear, accessible, and transparent makes sense for any business website.

While many privacy policy templates are available online, every industry has its own unique set of rules, and legal requirements are specific to each organization and how it operates. Let us help you develop a privacy policy that protects both your organization and your clients.