Big data, or data collection, are buzz words we read or hear about on a daily basis. Some of the world’s largest and most profitable companies, known for their cutting edge technology, search engines, software, and high-demand products are really in the business of collecting, aggregating, analyzing and selling data. It is arguably their most valuable asset, far more worthy than the technology, goods and services for which they are known.
So, what does data collection have to do with the new retail shop or restaurant that collects email addresses, account information, and other relevant information with every swipe of a credit card, and inputs consumer preferences with every order entry in the POS system? Often, these restaurants and retailers are simply using the data to analyze their guests’ activity with their business, send out promotions, newsletters, or other mass mailings. Though not at the scale of the conglomerate “big data” companies, these retailers, restaurants, and service businesses have an interest that is two-fold.
First, they must maintain a system to protect their consumers from identity theft and fraud. Maintaining guests’ privacy and protecting against fraud is not just a good business practice to keep consumer information safe and preserve their business reputation in the event of a breach; it may also be a legal duty under state and federal law.
Second, these businesses must protect themselves, and liability for data breaches. Many small businesses use a third-party to administer and collect and analyze their data, (think of the little payment attachment which you swipe your credit card with at the farmer’s market). Be sure the third-party administrator has taken steps to protect the data, and has not pushed off liability to the end user, i.e. the restaurant, boutique, or professional service company, and to make sure the third party is following the laws, regulations and best practices applicable to them.
Consult with an attorney at Dalton & Tomich, PLC to determine what laws apply to your small business and assist you in protecting your business and consumers.
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