Customer Information Security in the Marketing Field

As internet and cell phones are becoming more important in our lives, it has become obvious that the passage of our personal information is becoming a big issue. When people shop at an online store, they leave an electronic trails that provide lots of information - from their names and address to the types of goods that interest them when they search the site; or when you enter a contest or drawing, you are giving out your contact information.

Telemarketers and junk emails are a part of our everyday life. Have you ever wondered where companies got your information? There is no doubt that someone is passing these contact information around. Companies are always looking to get in touch with customers and find out about their purchasing patterns. Using consumer information is a privacy, ethic and fairness issue if not a legal one, because many people think their purchases and personal information are anonymous or somehow protected when indeed they are not.

The main goal of this paper is to bring attention to the fact that our information is being passed by companies to companies, and suggest further methods to protect our personal information.

What is Telemarketing?

Telemarketing, sometimes known as inside sales, is a means of direct marketing in which a salesperson solicits prospective customers to buy products or services. It has come under fire in recent years, it is considered as a nuisance by many people.

There are two major categories of telemarketing, business-to-business and business-to-customers, also known as retail, and the table 1 will show the main subcategories of telemarketing.

Table 1. Subcategories of Telemarketing

Subcategories of Telemarketing Definitions

Lead Generation The gathering of information and contacts

Sales Using persuasion to sell a product or service

Outbound Proactive marketing in which prospective and preexisting customers are contacted directly

Inbound Reception of incoming orders and requests for information. Demand is generally created by advertising, publicity, or the efforts of outside salespeople.

Source: Sandforsenate.com/types_of_telemarketing

Ever since telephone became common, telemarketers started using it as one of the main ways to promote their products. Figure 1 shows that telemarketing sales has increased drastically.

Figure 1 Telemarketing Sales from 1996 to 2002

Source: Direct Marketing Association

According to the graph above, the sales of telemarketing has increased from 63.1 billion to 100.3 billion in just six years. As the invention of smartphones, we rely more and more on our cell phones, it would make sense to think that the sales is still going up.

Statement of Ethics - Fairness

The American Marketing Association (AMA) commits to promote the highest standard of professional ethical norms and values for its members. The statement of ethics of AMA provides norms and value that are expected to be maintained by the society and professional organizations. (AMA)

Under the fairness categories of the statement of ethics, AMA states that all marketers must "seek to protect the private information of customers, employees and partners". (AMA)However, passing the personal information of customers is clearly violating this norm.

How Do Telemarketers Get Your Information?

Social Media Networks

With hundreds of millions of people using social media sites to share themselves with friends, they inadvertently fall in the false sense of safety and security. Some people even share their phone number and address on social networks, and most profiles are not private, which makes it easier for marketers to obtain your personal information. Also, don't forget some pictures actually contain the coordinates of where the picture was taken with might give your individual location.

It was reported recently that many debt collectors' first attempt to find people and information is through the traditional social sites such as Facebook and Twitter, because it is the fastest and most effortless way to reach to people.

Innocent information about your work, travels, and social activities reveal lots of information about yourself that provides telemarketers ways to contact you.

Purchase of Phone numbers

The most traditional way for telemarketers to get your data is probably to simply purchase it from a third party data provider. There are hundreds of data providers that have a wide variety of data on individuals. This data is accumulated through many sources, such as warranty cards that are sent in by individuals, purchases made online, deliveries by various services and by simply searching online in order to build a more lucrative data file to sell. Here are some examples:

Inadvertent Disclosure

If you sign up for a contest or a drawing, a phone number is usually requested. Such give-away promotions may have less to do with gifts than they do with obtaining your number for sales pitches. If you have your phone number printed on your checks, your name, address and phone number can easily be copied and entered into computerized mailing/phone lists.

Automatic Dialing Announcing Devices

These are able to determine all possible phone number combinations, even unlisted numbers, and dial them much more rapidly than any person can. (Public Utility Commission of Texas)

"800," "888," and "900" Numbers

These are another way for telemarketers to obtain your phone number. When you call these numbers, your phone number may be captured with a system called "Automatic Number Identification" or ANI. ANI uses equipment that automatically identifies and stores the number from which you are dialing.

Credit Requests

Whenever you apply for credit, even for something as small as household appliances, you give out personal information. Often, consumers are lured into signing up for these credit cards, especially at department stores, by the offer of interest-free financing with immediate