Thursday, July 26, 2007

Online Shopping Behavior Changing Due to Identity Theft Concerns

Yesterday, we reported on the new proposed legislation regarding the use of social security numbers and the protection of consumer data. From a direct marketing perspective, we mentioned that this is an area where we need to be very proactive as an industry to protect our customers (and their consumers) from identity theft and other consumer privacy concerns.

We have a unique opportunity to impact this before consumers are impacted -- or heaven forbid -- they change their buying behavior. If we don't figure out a positive way to impact this problem, our customers will react -- and their reaction will definitely mean a negative effect on our bottom line.

Case in point . . . DM News reports today that "in the wake of recent massive data breaches at businesses, educational institutions and medical facilities, consumers are growing more concerned about identity theft and, as a result, changing their buying behavior . . ." In fact, the article goes on to report that "thirty-six percent of respondents said they would not use their credit or debit cards to make a purchase with a Web merchant they do not know. The study also shows that 62 percent of respondents have been notified that their confidential data have been lost, and 84 percent of those reported increased concern or anxiety because of data-loss events."

This is not good news. Online purchasing behavior is changing due to these heightened security concerns -- and let's face it -- it's changing for good reason. If any of you have ever gone through trying to clear things up after your identity has been stolen, you know what a painful and time-consuming process this can be.

As an industry, it is imperative that we attack this issue head-on. As discussed yesterday, we do have the tools and technology to help protect our clients with sound data management and data security techniques. Companies like Experian, Acxiom/TransUnion and Equifax have full suites of tools developed specifically to combat identity theft. I realize that it is difficult to stay in front of identity thieves but it is incumbent upon us to anticipate their next move and squash it. Of course, there are definitely some steps that consumers can take on their own in order to protect their identity. However, as direct marketers, the best course of direction is to share best practices with one another as we come up with creative ways to ensure that our customer databases remain secure.

If you have a success story or best practice that you'd like to share, please comment so that we can post it here. At the end of the day, it behooves every single direct marketer to attack this issue to protect our valuable clients and stop those thieves in their tracks!


Ron Shevlin said...

Have you seen I hadn't heard of this before today, it's a firm that guarantees to protect your ID. On the company's home page there are testimonials from customers. The one on the far left is the CEO of the company. Mouse over it and it shows his picture -- and his social security number (they're also running ads in the WSJ with his SSN).

Suzanne Obermire said...

Ron, thanks for sharing I'm not sure exactly how he's able to do this, but what a great business idea, one that capitalizes on what consumers need now. It's basically an insurance premium at $10 per month that assists you with identity theft--if critical mass forks over $10 each month, it's a goldmine!

I tip my hat to him and to you for sharing.