E-commerce and consumer privacy closely linked

Ontario Privacy Commissioner
Dr. Ann Cavoukian said securities
dealers and the investment industry
must heed consumer habits if they
want to benefit from the
flourishing Internet.

“Ignore privacy at your own
peril,” she warned. “The time
has come to reign in this
indiscriminant enthusiasm for the
Internet — the backbone of
e-commerce.” She attributed
consumers’ reticence to provide
personal information on the Web
to the rampant misappropriation
of such data. The commissioner
touched briefly on the misuse of
“psychographics” to gather
information for marketing
purposes. “If 42.1% of those
surveyed have admitted to
falsifying registration
information on a Web site,
then this information is
useless,” she railed.

The remedy to such problems is
to ensure consumers have access
to a Web site’s privacy policy.
Secondly, she believes, companies
must avoid inappropriate use,
including the sale, of
psychographic information.

Chris Erickson, a member of
IFIC’s subcommittee on e-commerce,
released of a series of voluntary
guidelines intended to reduce
barriers to e-commerce caused by
the lack of consumer confidence.
The guidelines, which are pending
publication, are based on the
Canadian Securities Administrator’s
draft policies on electronic
document delivery and e-trading.

Erickson said the industry’s
proper use of the Internet hinges
on four areas. Consumers must be
notified that a document has been
sent via electronic medium; and
everyone must receive the
information at the same time,
regardless or technology. There
must also be proof that the data
was sent, and all documents must
retain the integrity of the
original to guard against
corruption.

IFIC’s conference continues
Thursday at Toronto’s Metro
Convention Center.