EXECUTIVE SUMMARY

The points contained in this summary represent the major findings from the 1998 Privacy Concerns & Consumer Choice Survey. Additional analysis and commentary on these as well other findings can be found in the main body of this report.

Concerns over threats to personal privacy remain at very high levels and, in some cases, are increasing. Most people feel that businesses ask for too much personal information, and that consumers have lost all control over how this information is used. Moreover, few people express strong confidence that businesses are using consumers' personal information properly.

The number of consumers who are concerned about threats to their personal privacy, which crested in the mid-1990s, remains high. A total of 88% of consumers say they are concerned, and more than half (55%) are "very" concerned.

82% of consumers say they have lost all control over how personal information is used by companies (with 50% agreeing "strongly") and 61% do not believe that their rights to privacy as a consumer are adequately protected by law or business practices.

More than three out of four consumers (78%) feel that businesses ask for too much information (an increase from 70% in 1997) and although 51% of consumers say they are confident (either "very" or "somewhat") that American businesses use the personal and confidential information collected in a proper manner, less than one in 10 (9%) say they are "very" confident about this.

Although only 51% of consumers believe that businesses are paying more attention to privacy policies these days, many more (69%) still prefer voluntary measures over government intervention to ensure consumer privacy protection.

Consumers' concerns about how businesses use their personal information are being manifested in privacy protection behaviors.

The 1998 Privacy Concerns & Consumer Choice Survey asked consumers whether they personally had ever been the victim of an improper invasion of privacy by a business. A total of 41% of consumers indicated that this indeed had happened to them.

Either through direct experience with a privacy invasion (noted above) or as a result of generalized concerns about personal privacy, three out of four consumers (78%) say they have refused to give information to a business or company because they thought it was not really needed or was too personal. The last time Harris asked this question was in 1990. At that time, only 42% of consumers said they had refused.

Also of note is the finding that 43% of consumers have asked a business to withhold their name and address from a list that is sold or shared with other companies, again demonstrating their desire to gain control of their personal information.

Consumers distinguish between various types of businesses when it comes to the personal nature of the information collected. In general, however, nearly all consumers say it is important to see the information that is collected.

The majority of consumers believe that information collected by businesses such as local and long distance telephone companies, department stores, banks and credit card companies is personal, but only banks and credit card companies stand out as collecting information that is "very" personal (46% v. 19-22% for the other types of businesses). Moreover, only credit card companies are suspected of having released consumers' own personal information improperly by more than one in five consumers (23% compared to 11-13% for the other types of businesses).

Nevertheless, nearly all consumers (92%) say that it is important to ask to see the information kept about them by businesses and organizations such as banks, department stores, telephone companies, and credit card companies.

Nearly all consumers consider telemarketing calls "intrusions," and the majority would opt out of receiving such calls if given the chance.

When asked to characterize the telephone calls they receive at their home from companies wanting to sell them products and services, the majority of consumers (79%) say these calls are either "always" (47%) or "mostly" (32%) intrusions.

It is not surprising then, that 68% of consumers also say that if their local telephone company gave them the opportunity to opt out or decline to receive telemarketing calls about offers of new telecommunications products and services -- they would exercise that option.

Very few people voice strong acceptance of the uses that telephone companies make of consumers' personal information.

Close to one in two consumers (ranging from 49% to 58%) believe that their local telephone company currently uses various types of information about them to decide which customers will be sent information about special offers, and existing and new products and services.

And although just over half (55%) say these practices are acceptable (either "very" or "somewhat") very few (7%) say the practices are "very" acceptable.

When it comes to accepting the uses that local telephone companies make of customer profile information, consumers do focus on how and by whom the information will be used. Although most consumers are willing to accept the use of such information by their telephone company, acceptance levels drop significantly when this information is shared with non-affiliated companies. Giving consumers advance notice and offering them the opportunity to opt out greatly increases their acceptability.

Most consumers (61%) find it acceptable for businesses in general to use information from customer profiles to inform them about new and existing products and services that might be of interest to them. This figure increases to 83% when the advance notice and opting-out features are added.

The majority of consumers (69%) find it acceptable for local telephone companies to use customer profile information when that use is related to the marketing of telephone products and services by the local telephone company. If the telephone company were to provide advance notice and offer customers the opportunity to opt out of receiving such calls, an additional 14% would find the practice acceptable -- resulting in a total acceptance level of 83%.

Consumers are less accepting of having their local telephone company share their customer profiles with other affiliated companies. Initial acceptance drops to 50% who say they would find this practice acceptable. Advance notice and the opportunity to opt out, however, appeals to an additional 28% for an overall acceptable level of 78%.

Consumers are least accepting of local telephone companies sharing customer profiles with non-affiliated companies for the purpose of telemarketing -- only 20% find this practice acceptable. The impact of an advance notice and the opportunity to opt out is most dramatic here, with an additional 46% of consumers now finding this practice acceptable resulting in a total acceptance of 66%.

The positive impact of giving consumers advance notice and offering them the opportunity to opt out of such uses of their customer profile information by their local telephone companies increases with the age of the consumer, their education level and with household income.

Consumers responded strongly when considering five privacy policies that their local telephone company could adopt in handling customer information. The majority indicated that each of the five policies presented would be absolutely essential to them.

Giving customers access to their transaction records so that errors might be corrected -- 79% said this would be "absolutely essential" to them;

Being advised and consulted by their local telephone company about whether or not it would be permissible to release their personal information to other businesses (73%);

Advising customers of the type of information being collected about them, and how it is being used (71%);

Giving consumers the opportunity to opt out of telemarketing calls from their local telephone company (65%); and

Ensuring that only relevant information about customers be collected and used by their local telephone company (58%).

At the same time that consumers are voicing support for local telephone company privacy policies, less than half are giving their local telephone companies top marks when it comes to privacy protection.

Less than half of consumers (42%) believe that their local phone companies have privacy policies (though 11% admit being not sure);

And although 69% of consumers express some confidence that their local telephone companies follows any set privacy policies, less than one in five consumers (only 16%) is "very" confident about this.

Not surprisingly then, less than half of all consumers (42%) give their local telephone companies top marks (i.e., ratings of 8, 9, or 10 on 10-point scales) for "respecting the privacy of customer personal information," and less than a third (31%) do so for "explaining fully how personal customer information will be used." (Long distance companies do not do much better -- 43% and 35% of consumers, respectively, give their long distance companies top marks in these two areas of privacy protection.)

Building confidence in local telephone company consumer privacy protection may benefit from establishing consumer privacy panels and conducting independent audits of privacy standards.

Consumers were asked to react to the concept of creating panels of consumer representatives who would look at proposed policies of local telephone companies and subsequently advise on how well these policies meet with consumers' viewpoints. Nine out of 10 consumers (90%) say such a consumer panel would be important to them with more than half (53%) saying it would be "very" important.

Similarly, 83% of consumers say it would increase their confidence that their local telephone company was following the privacy policies it had set if these companies were to conduct and publish the results of independent audits of privacy standards. Again, more than half (52%) said it would increase their confidence "a great deal."

The 1998 Privacy Concerns & Consumer Choice Survey also documents differences among various demographic groups when it comes to general privacy attitudes as well as opinions about the uses of personal customer information. These differences are seen primarily in comparisons of sex, race/ethnicity, education and household income.

Consistent with previous Harris-Westin consumer privacy surveys, females and males differ on some key privacy attitudes and experiences -- with females more likely to express concern.

Females express more concern about threats to their personal privacy in America today (92% of females are either "very" or "somewhat" concerned compared to 83% of males) and are more likely than males to say that consumers have lost all control over how personal information is circulated and used by companies (53% v. 47% agree "strongly" with this);

In reacting to the various uses local telephone companies could make of customer profile information, acceptance drops off more for females than males as the use moves away from the local company and the information is shared with other affiliated and non-affiliated companies.

Females are also more in favor of a consumer privacy panel (56% v. 50% of males say such panels would be "very" important to them) and are more likely to say independent audits of privacy standards for their local phone companies would increase confidence a great deal (54% v. 50% for males);

Interestingly, however, males are more likely than females to report having refused to give information to a business or company because they thought is was not necessary or was too personal (79% v. 77%).

Among the most critical of the uses of consumer information and privacy protection are White Americans, older consumers, more educated consumers, and more affluent consumers. These groups are also among those most likely to want to opt out of receiving telemarketing calls and are the least likely to say that businesses are paying more attention to privacy policies these days.

The incidence of characterizing telemarketing calls as intrusions (either always or most of the time) increases with age, education and household income. Whites are also more likely to consider these calls intrusions than are African-Americans or Hispanic Americans.

Older consumers, more educated consumers and more affluent consumers are also more likely than their counterparts to say they would opt out of receiving telemarketing calls from their local telephone companies and are also more likely to say they have refused to give information to a business or company because they thought it was not really needed or was too personal.

Consumers with more education and larger household incomes are also more likely to report having asked a company not to sell or give their name and address to another company;

These same demographic characteristics are associated with the lowest levels of acceptance when it comes to the use of individual customer information by their local telephone companies; and

Not surprisingly, given the privacy attitudes and behaviors just noted, Whites, more educated consumers and more affluent consumers are among those most likely to say that privacy policies for local telephone companies are "absolutely essential."

In many ways Hispanics and African Americans are much less critical than Whites when it comes to their opinions of privacy protection and business practices. This finding is very interesting for Hispanics in particular who are among those most likely to report having been victimized by a privacy invasion. Hispanics are, however, among those most in favor of a consumer privacy panel.

Hispanics (65%) and African Americans (57%) are less likely than Whites (85%) to consider telemarketing calls intrusive and they tend to be more accepting of local telephone companies using various types of personal information to market products and services than are Whites (69% and 61% say this would be "very" or "somewhat" acceptable compared to 52% for Whites).

Hispanics and African Americans are also much more likely than Whites to say they've noticed that businesses are paying more attention to privacy issues these days, and Hispanics (in particular) are less likely to think businesses ask for too much information (38% v. 57% for African Americans and 48% for Whites);

Hispanics are also more likely to agree that their rights to privacy as a consumer are protected. Specifically, 51% of Hispanics agree that their rights to privacy are protected v. 42% among African Americans and 36% among Whites.

Given the above, it is interesting to note that Hispanics are more likely than other groups to report having been a victim of an improper invasion of privacy by a business (52% say this has happened to them v. 40% for Whites and 38% for African Americans).

Hispanics, more so than African Americans or Whites, are also more likely to say that the information collected by local phone companies and long distance companies is "very" personal (41% and 36% of Hispanics consider information collected by local and long distance telephone “very” personal v. 19% among the other groups). They are also more likely say local telephone, long distance, department stores and credit cards have released the personal information improperly.

Hispanics among those most in favor of a consumer privacy panel (69% say this would be "very" important v. 62% of African Americans and 51% among Whites).

Finally, Hispanics and African Americans are among the heaviest users of home security services, and Caller ID, and are also more likely to have unlisted numbers.