Chapell & Associates

Tuesday, April 04, 2006

Regulators: Privacy Notices too Confusing

Seattle Post-Intelligencer - March 31, 2006
The privacy notices stuffed into envelopes with bank and brokerage-firm statements and credit card bills aren't getting much of a reading from consumers and are too complicated for most to understand, regulators say. The notices from financial institutions disclosing their privacy policies, required by law, should be simpler, shorter and better designed so that consumers can understand them, said the report issued Friday.

The Chapell View
It's become something of an accepted fact in online marketing that consumers are unlikely to read privacy policies. According to this report from the Federal Reserve and other banking regulators, evidently this holds just as true offline as well.

This might not be entirely surprising. But what's interesting, I think, is in the reasons given by consumers as to why they don't pay attention to the privacy notices that come with their bank statements. When we talk about privacy policies online, one of the major concerns is accessibility - where the link to the privacy policy is, whether it's available from an End User License Agreement, and so on. But getting a privacy policy in an envelope is fairly accessible. So why aren't they being read? They're too complicated.

While this may neither be that surprising, it might imply two things. In the online world, we can make privacy policies and EULAs as accessible as we'd like, but if they remain full of legal jargon or scroll on for an extended number of pages, consumers still aren't going to necessarily make their way through them. Avoiding a deceptive privacy policy can often mean providing conspicuous notice. If consumers aren't reading privacy policies because of their complexity, 'conspicuous' might have as much to do with brevity or ease of understanding as accessibility.

Offline, I do wonder, though: even if the privacy policies stuffed in with credit cards were shorter, clearer and more concise, would they be read? No matter how simple an online privacy policy is, it still hasn't been obvious that more consumers will click on it.
posted by Isaac on Tuesday, April 04, 2006

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