Fading Data

Personal information that has been collected about you has a commercial value. It’s actual value depends on how detailed and accurate the information is and whether there is a need for it.

Unfortunately this encourages companies to gather and hoard personal data, even about things that aren’t relevant to their current needs, because it may have the potential to be of value at a later date.

For example a supermarket may conduct a survey to find out the modes of transport used by their customers to reach their stores. Even though the survey is about travel patterns they may perhaps identify you by your loyalty card membership and record whether you are a car owner. If at a later date they launched a car insurance service they would know who to contact first.

However storage and use of personal data usually requires your consent. Since neither party can predict how that information may be used there is a growing trend to restrict information on a need to know basis. There are also concerns that data can no longer be held securely for extended periods because of high profile data security lapses. This lack of trust reduces the potential value of commercial data collection because less and less information is likely to be shared.

Privacy policies are set out to explain how information about someone is kept and how that information will be used. A key factor in establishing trust with the customer is how long the information will be held. Companies will often put a lot of effort into checking their records on a regular basis because stale data costs money. It is a waste of money sending out a promotional offer to an incorrect address simply because they didn’t know you have moved.

When you make an online purchase you will usually share details of your delivery address with the retailer. The retailer will find this information essential to complete the transaction but may ask you if they can retain it for marketing purposes. An increasing trend is for customers to opt-out of further usage but a fading data privacy policy may help to encourage more people to opt-in and reverse this trend.

For example as a business grows it may want to identify the best location for a new distribution warehouse or shop and to do this they need to identify where their customers are based. They can’t do this if you haven’t consented to your personal information being used for marketing purposes but if you opted-in to a data fading policy they may have access to enough information to help with their planning requirements.

The concept is quite simple. To start with you provide your full address including house number and postcode. You opt-in to their data fade privacy policy. After a while their record of your address is simplified so that they only keep details of your town. Later this is reduced to county level and eventually your details are completely removed. By offering to fade data in this way they can encourage more people to opt-in and gain valuable extended usage of your personal information.

Companies that do not offer a fading data privacy policy are likely to gather less information from their customers due to their privacy and security concerns about long term data retention.