Telco customers at risk for online privacy breach

Study finds that telecommunications companies are slipping when it comes in addressing privacy concerns

Telcos conducting business online need to buck up customer privacy even as their ability to communicate improves.

Those are the findings of the Customer Respect Group (CRG), a research and consulting firm focused on how corporations treat their online customers. The group this week released findings from its First Quarter 2007 Online Customer Respect Study of the Telecommunications Industry.

The study found that telecommunications companies overall are slipping --- especially compared to retail and other high-tech industries -- when it comes to addressing consumers' privacy concerns.

Telecom firms ask for more personal data than companies in other industries, CRG found, and this data is often unconnected to the request being made by the customer.

"We see a race to capture customer data to perform new campaigns," states Terry Golesworthy, CRG president. "This results in some positive and negative aspects for the customer with the increased use of electronic marketing. Companies need to make sure they do not cross a line that might damage their overall brand reputations."

The study evaluated 54 Web sites across three geographies -- the United States, Canada and the United Kingdom. Sixty-four percent of companies ask for excessive amounts of personal data, compared with 43 percent in other industries, the group found.

The collection of data is one breach of the customer's privacy; in addition, the telecom industry goes on to reuse the data more than other industries. More than three-quarters of companies use the data for ongoing marketing, exceeding the average of 64 percent measured in other industries, CRG found.

The telcos fared much better in online communications with their customers. Just 8 percent of e-mail inquiries were ignored entirely, which is much better than the overall industry average of 24 percent and an improvement from the 13 percent ignored in the group's last report a year ago.

As for quality and timeliness of responses, nearly half of inquiries were responded to within a day and the responses were of a helpful and relevant nature. This figure is up from about one-third a year ago, CRG notes.

"We see greater detail underneath the numbers with cable companies moving from worst to first within a year," CRG states. " Wireless companies have stayed static after great gains previously, and traditional telecommunications companies after a static period have started to move up slowly."

The best responders were CenturyTel and Cox Communications, both based in the U.S., according to CRG.

The group also detected a growth in online chat, or "instant help," which was rarely found in the industry a year ago. Today 25 percent of companies have introduced that capability to answer questions, including Qwest, Comcast and Verizon, the group notes.

CRG uses a common set of criteria for each telco, from which a Customer Respect Index (CRI) is provided for each company. The CRI is a qualitative and quantitative analysis and benchmark of a customer's experience when interacting via the Internet.

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