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A privacy policy is a statement that companies have on their website that informs users about the collection, processing, protection and use of their private data. Users are often prompted to review and accept privacy policies, but many of them don’t read through these policies because they don’t think it’s necessary. It’s important to read through these policies to know what information is being collected and how it’s being used.
Continue reading to learn more about privacy policies, why they’re necessary for companies to have and why consumers should care about them.
The Purpose of a Privacy Policy
There are two main purposes to having privacy policies. Firstly, privacy policies are what guide companies to act more transparently. For example, if you take a look at Keeper’s privacy policy, you’ll see that our privacy policy reflects our commitment to security and transparency and was created to help users better understand how their private data is protected. It also provides an explanation as to why certain data is collected and how it’s being used.
Secondly, privacy policies give users more control over their individual data and privacy. By reading a company’s privacy policy, a user can decide whether or not they want to have an account with a company that collects certain data about them. This helps the user better protect their online privacy and have better control over it.
Why Are Privacy Policies Necessary?
Here are a few reasons why privacy policies are necessary and required for companies.
Required by the law
There are certain state and federal laws that have provisions in place about data privacy. One example of this is the California Consumer Privacy Act (CCPA) which is a law that gives Californian consumers more control over the personal data companies collect about them. This law allows Californians to sue companies who violate privacy guidelines and can also result in fines for companies that don’t comply.
Another example is the General Data Protection Regulation (GDPR). This is one of the toughest privacy and security laws in the world that protects consumers in Europe. This law gives Europeans the right to know what data companies are collecting, the right to request a copy of their data and the right to tell companies to delete their personal data and stop sharing it with third parties. This law applies to all companies that have a presence in the European Union (EU).
Helps companies conform with legal statutes
Since privacy policies force companies to be more transparent about their data collection processes, companies can use privacy policies as a guideline to avoid potential lawsuits. If a consumer were to try to sue a company for data collection that they are already transparent about collecting, their privacy policy serves as evidence and protects them from potential lawsuits. This is why it’s important that consumers read a company’s privacy policies before accepting them. That way they know what they’re getting into and what data they’re giving a company the right to collect.
Builds trust between a company and its users
One important aspect of privacy policies that goes beyond laws and lawsuits is that they build trust between a company and its users. Privacy policies force companies to be more transparent about what they do with their users’ data and this allows users to trust them with their personal data since they know what it’ll be used for. If companies were secretive about data collection, users wouldn’t trust them because they wouldn’t know why a company wanted to collect data about them.
What Should a Privacy Policy Include?
Here are a few of the important details that should be included and explained in a privacy policy.
Types of personal data that is being collected
A privacy policy should include a detailed list of what data is being collected by the company. This can include phone numbers, locations, IP addresses, email addresses and more depending on the company. The type of data being collected should also be specified explicitly, not in broad terms such as “contact information.”
Why that data is being collected
Along with what type of data is being collected, a privacy policy should also specify why that data is being collected. This gives users a better understanding as to why a company might collect specific data like a user’s location or IP address.
How collected data is being used
A privacy policy should also explain what the collected data is being used for. It can be as simple as storing email addresses to send users account notification emails and as complex as sending user data to third parties. If a company is sharing user data with third parties, they need to specify this in their privacy policy by including a disclaimer. If not, companies are at risk of legal repercussions.
Methods being used to collect data
Every piece of data that is being collected should also have an explanation about how it’s being collected. Some common types of data collection methods are contact forms, website analytics, newsletters, surveys and cookies. Cookies are small files that keep track of your online activity including websites you visit, products you’ve placed in your shopping cart and more. Knowing how their data is being collected provides users with full transparency over the entire data collection process.
How to opt out
After reading a company’s privacy policy, some users may want to opt out. Opting out means the company will no longer be able to collect the user’s data since they won’t have their consent to do so. Due to this, companies need to clearly state in their privacy policies how users can opt out of having their data collected. This is especially necessary for consumers who are protected under laws such as the CCPA and the GDPR.
Why Should I Care About Privacy Policies?
Users often ignore privacy policies when they’re asked to review and accept them, but it’s important users fully review them so they have better control of their personal data. They have to be able to trust the companies they’re providing their information to and fully understand how that company is collecting, using, sharing and storing their data.
In the event of a security breach, users’ Personally Identifiable Information (PII) such as credit card numbers and credentials could be stolen and sold on the dark web. This could place the user at risk of having their identity stolen and their other online accounts compromised – making it crucial for them to know how their data is being handled.