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Proper privacy policies safeguard against consumer litigation

On Behalf of | Oct 19, 2024 | Business Law

Those holding leadership roles at organizations typically recognize the importance of diversifying revenue streams. In addition to offering goods or services directly to consumers, for example, many organizations also offer outside advertisement opportunities to the customers they serve. They may also resell client information to companies in adjacent industries.

Those practices are relatively widespread, but some of them run dangerously close to violating consumer privacy rights. Even companies that do not offer digital services or that do not mine digital data in the ways that social media platforms do may need to develop privacy policies and make disclosures to customers and clients to protect against the possibility of future litigation.

Many consumers value their privacy

Some people share quite a bit about themselves online, but not everyone has a tendency to make over-the-top digital disclosures. In fact, some people are exactly the opposite. They are highly protective of their personal data and do not want companies sharing information about the products or services they acquire or even their identity with other outside parties.

Any company that gathers and retains consumer, customer or client information likely needs to advise those individuals of what the company retains and how it shares that information. The failure to do so might lead to frustration and possibly even litigation if consumers find out that the company has monetized their private information without their consent.

The lawsuits that result from allegations of consumer privacy violations can lead to not just expensive litigation but also damage to the business’s overall reputation. The most effective means of mitigating that risk include making disclosures to the public and giving them options to opt out of the sale or sharing of certain information.

If opting out is not an option, companies typically need to make sure that consumers are aware of that fact. In an age where the expectation of privacy has diminished significantly, some people are more jealously protective of their personal data than ever before.

Leaders within organizations can help prevent damaging lawsuits by proactively establishing policies and effectively communicating that information to individual consumers. Identifying potential sources of operational liability is crucial for those leading organizations in an increasingly complex and connected economic landscape.