Deceptive marketing practices, while illegal, are unfortunately still common. False advertising can lead to plenty of problems for both the perpetrating company and anyone that falls victim. But while any kind of misleading activities have potentially severe consequences, one particular form of false advertising is arguably the worst: “privacy washing”.

“Privacy Washing”

“Greenwashing” describes the actions of a company that claims to engage in more environmentally-conscious activities than it actually does. In a similar vein, “privacy washing” refers to a company’s efforts to make their data privacy setup sound amazing without actually following through. Both practices are deceptive. But privacy washing can do the most immediate harm to companies and individual customers alike.

When a business talks a good game about privacy while putting in no real effort, it lulls their customers into a false sense of security. People feel better about handing over private data to someone with such a seemingly impressive security system. But now both sides are vulnerable. Customers are of course vulnerable to having their data stolen or exposed and used for nefarious purposes. Meanwhile, the company is vulnerable not only to theft of their own data, but also to the legal and financial consequences of lying to their clients.

What Does a Privacy Violation Look Like?

News stories tend to focus on massive data breaches, like the mass theft of private information from Equifax in 2017. Another particularly egregious example comes from May 2023, when a free VPN service exposed more than 360 million records in an unsecured database. Most users install VPNs specifically to improve their online privacy. A VPN failing to protect its users’ data, especially on this scale, is a very serious situation.

These events are certainly devastating. However, not all privacy violations are this far-reaching and obvious. Even if only one person’s private data is compromised, the victim is at risk. Sensitive information deserves to be protected, no matter how insignificant it may seem.

Privacy Harms: Consequences of Violations

Privacy harms, or the consequences of even a minor privacy violation, can follow the victim(s) for years to come. For customers, these harms may include:

• Identity theft
• Physical injury, if someone uses the leaked data to assault the victim
• Financial loss from hacked credit cards or bank accounts
• Damage to their reputation or relationships
• Fear of continuing public activities, especially controversial ones, if they can be easily tracked down and harassed
• Discriminatory treatment based on leaked sensitive data like gender or ethnicity
• Emotional distress
• Loss of trust in the offending company
• Loss of control and the ability to exercise their right to privacy

Losing the ability to exercise your right to privacy is a very damaging privacy harm to individuals. When a customer trusts a company to protect their rights, and the company fails, the customer loses some of their own ability to keep their information private.

On the other hand, companies aren’t immune from privacy harms either. Following a data breach, businesses may face:

• Liability for damages done to a customer’s person and/or livelihood based on stolen data
• Financial costs to reimburse harmed parties
• Significant damage to their reputation and relationships with other businesses
• Decreased profits as customers lose trust and leave
• Vulnerability to further theft of customer or company data
• “Damage control” as the company scrambles to stop the problem and salvage their image
• Large amounts of time and money spent improving their security measures to prevent a second incident

Damage to Your Company’s Reputation

In the Equifax example mentioned earlier, the company suffered severe damage to their public image for quite some time. The word “Equifax” became temporarily synonymous with a massive data breach. The court of public opinion is not kind to companies with lax privacy setups.

Not every data breach results in lawsuits or millions of dollars in fines. Some never make it to court at all, and some are dismissed in court because of a lack of provable harm. However, even if the legal system doesn’t come after you, unhappy people will. Your customers will remember. People who have never purchased from your company will likely hear about it too. You’ll likely deal with a lot of negative publicity before reclaiming your image.

How to Do Better

Even a minor violation can cause privacy harms that plague both your company and your customers for years. Instead of just talking about how amazing your privacy strategy is, why not make it a reality? With 4Comply, you can easily keep track of every relevant privacy law and only use customer data for its intended purpose. Our system is designed to show your customers that you can be trusted with their private data. Your marketing campaigns will more effectively target interested parties, and your customers’ information will be safe. Contact us today to take the first step in preventing privacy harms.