Guide to Privacy Laws and Policies for Small Business

With technology aplenty, small businesses are now able to track customer, prospect, employee and other information – both online and offline – with detail and precision never before possible. But along with those data gathering capabilities has come increased concern for privacy, safety and security among customers and employees.

What kinds of information does your business gather, store and use? Who has access to it? What might it be used for? Customers and employees must be assured that you will use information you have accurately and responsibly. And beyond that, you must also comply with a wide range of privacy protection rules and regulations. As the Better Business Bureau points out, when consumers give you personal information such as a credit card number, email or mailing address, they feel they are taking a risk that the information will be misused. So why do they do it?

1. Because you have something they want – a product, information, offer or service
2. Because they understand that exchanging information is necessary to completing the transaction
3. Because they think the risk is small

Today's acute privacy concerns offer small businesses an opportunity to offer extra value via a well-conceived privacy policy and secure information system. If your business shows that you understand and protect privacy, your employees will be happier and customers will want to do business with you.

Action Steps
The best contacts and resources to help you get it done

Review state and federal privacy laws

The Better Business Bureau has the best and most helpful information on the Web about privacy policies and compliance for small business.

I recommend: BBB's Privacy Made Simple has a rundown of privacy laws you need to know about. Hint: There's a whole bunch of 'em, including the Children's Online Privacy Protection Act, Computer Security Act, Customer Proprietary Network Information, Electronic Communications Privacy Act and many others. Understanding current privacy legislation will get you up to speed fast.

Get help from the Privacy Manager's Resource Center

Developed by the Better Business Bureau, this resource delivers the tools and information any small business needs to be smart about privacy.

I recommend: The Privacy Manager's Resource Center has tools and resources to help. Get guidance for creating a privacy policy that's appropriate to your business, and other tips to help build a climate of trust with your customers.

Take a privacy policy quiz

How does your business stack up in the realm of privacy protection and knowledge?

I recommend: Find out with this simple privacy assessment quiz. The Better Business Bureau's excellent service Understanding Privacy is available free at the BBB Web site. It offers great tips on protecting privacy, for individuals and businesses alike, both online and off. The consumer toolbox has good advice and the Privacy Manager's Resource Center can help you create a privacy policy for your own business. The ID Theft section is also very useful.

Keep up with the latest issues and requirements for privacy protection

Privacy protection and compliance has become increasingly important for small businesses.

I recommend: Privacy Rights Clearinghouse is a great place to discover the ins and outs of privacy protection. Their Privacy Topics A-Z list delivers helpful advice on just about any specific privacy matter that concerns you, from background checks, caller ID and check writing, to credit reports, the Do-Not-Call Registry, Internet privacy and many more. If your Web site is targeted to kids, you'll need to understand and comply with the Children's Online Privacy Protection Act.

Provide customers with a way to access and update personal information

The Better Business Bureau can show you how.

I recommend: Get details at Understanding Data Access.

Tips & Tactics
Helpful advice for making the most of this Guide

• Establishing a small business privacy policy is part science, and part ethics. BBB separates science into six parts: Notice, choice, security, enforcement, access and onward transfer. For each part, there are rules you must follow.
• On the ethnical front, if you do the right thing, customer trust will follow.
• After you develop a privacy policy, post it in your business and on your Web site.
• Your privacy policy should include internal procedures for collecting and handling customer information. Make sure your employees all know your policy.
• Include a way to collect customer questions, comments and complaints regarding privacy.
• Make sure your privacy policy includes steps for managing employee information.

The official source of Privacy Laws and Policies for Small Business is
the Confidentiality and Employee Monitoring page at Business.com