Telecoms industry "worst for consumer privacy"

The telecoms industry has been accused of collecting excessive amounts of personal data from its customers, with telecom firms faring worse for privacy than companies in other industries.

The accusations come in the “First Quarter 2007 Online Customer Respect Study of the Telecommunications Industry”, from international research house, the Customer Respect Group.

The study evaluated 54 websites as a representative sample of the telecom industry’s leading companies across the US, Canada and the UK.

While the overall Customer Respect Index (CRI) for the telecoms industry has improved marginally over the past six months, bringing it about level when compared to other industries, the market continues to fall short in the area of privacy.

Whereas consumers’ privacy concerns have been better addressed in the high tech and retail industries, telecommunications companies overall are slipping, the research group said.

The Customer Respect Group found that 64 per cent of telecoms companies were judged to ask for excessive amounts of personal data, compared to an average of 43 per cent in other industries.

Terry Golesworthy, president of the Customer Respect Group warned that the collection of data is one breach of the customers’ privacy but said the industry goes on to re-use the data more than other industries.

More than three quarters of companies were found using the data for ongoing marketing, which exceeds the average of 64 per cent measured in other industries.

But Golesworthy said that these figures do not reflect an interesting disparity. Traditional telecommunications companies are more respectful than cable companies, which the researchers suspects is possibly a reflection of sectors merging and companies reaching out to non-traditional customers more aggressively.

Supporting this, Verizon Wireless, AT&T and CenturyTel lead the way for respecting customer privacy, followed by Bell Canada and amp’d mobile.

The findings are something of a turnaround for AT&T, which just under a year ago, was at the centre of a high profile scandal that leading US telecom providers may have handed over millions of phone records to US intelligence agencies.

Overall, the traditional telecommunications sector came out with the best CRI, overtaking wireless companies for the first time in two years and beating the cable and MVNO sectors. Canadian companies overall beat out both their US and British counterparts.

“The telecommunications industry is in a state of flux and churn and we see major changes disguised in the overall numbers,” Golesworthy said. “As companies reach across traditional business lines to gain new customers, we see a race to capture customer data to perform new campaigns. This results in some positive and negative aspects for the customer with the increased use of electronic marketing. Companies need to be make sure they do not cross a line that might damage their overall brand reputations.”

The top five companies in the telecommunications review overall were, CenturyTel at the top, O2 UK in second, Virgin Mobile Canada in third, AT&T in fourth and in joint fifth, Verizon Wireless and Virgin Mobile UK.