Legal Issues that Arise with Data Driven Marketing Campaigns
Believe it or not, you’ll occasionally run across situations where someone in the legal community will take an interest in your data driven marketing customer data. Usually when this happens, your legal team is consulted first. But in any case, you should make sure you have their approval before providing any data.
Customer data and criminal investigations
There are a number of situations in which customer records may be subpoenaed as part of criminal investigations. They may want to know whether someone was where they said they were at a given time. They may want to understand what purchases were made by a given person.
The most common law enforcement situations usually relate to financial records. The PATRIOT Act that was passed after 9/11 contains, among other things, some prescriptions for banks and other financial institutions related to the prevention of money laundering.
The focus of these rules relates primarily to large, anonymous monetary transactions. The airline industry is required to respect the no-fly list designed to prevent terrorists from boarding planes. But there’s also a do-not-wire transfer list that banks need to check when they process these transactions.
Another type of monetary transaction that’s tracked closely is large cash deposits. These types of transactions have been of interest to the IRS for a long time. They’re sometimes signals that tax evasion is afoot. But they also are of interest as signals that more nefarious money laundering might be going on.
There’s a tension in the legislative environment and legal environment around customer data. On the one hand, consumer privacy is a hot button issue. On the other hand, public safety concerns in the wake of 9/11 have led to some increased authority for law enforcement. The legality of law enforcement requests for data is not always cut and dried. You need to let your company lawyers handle such requests.
Customer data and civil suits
Another situation where customer data is requested is in regard to civil court cases. Divorces get nasty. Business deals fall apart. The whole spectrum of people’s disagreements about money and property is fodder for the civil court system.
And when money comes up in civil court, financial records get subpoenaed. These subpoenas are generally pretty straightforward to deal with. Check with your lawyers if one should arrive on your desk.
The more visible civil suits related to customer data involve lawsuits against the company with the database. You have a legal responsibility to keep your customer data safe.
Consumer credit lawsuits are a staple of the civil court systems. Inaccurate credit scores, unfair lending practices, and other violations of lending regulations produce a steady stream of court cases.
Another type of lawsuit that’s fairly common involves data security breaches. You’ve no doubt heard a number of stories over the years about someone walking out of a company with a disk full of personal information about customers. In the age of identity theft, this obviously raises some hackles.
Electronic devices, particularly mobile devices, provide a vast amount of customer data, including detailed location information. This data is a dream for predatory criminals if they can get their hands on it. This fact, combined with the widespread use of smartphones by children, is getting increasing attention in legislatures.