Data is absolutely vital to your occupation as a business owner. After all, this information lets you understand your market better, enabling you to provide better customer experiences. However, customers aren’t as willing to share personal information with companies.

In fact, a study found that 79% of Americans are concerned about how their data is being used by companies, which is not good for building trust. This is why the national and federal governments have created laws to protect customer data.

If you are not familiar with the principles of data accumulation, here are the legal requirements you need before you can start collecting your customers’ data.

Privacy Policy

According to content marketer Abhishek Talreja, a well-written privacy policy is going to detail all of the different types of personal information that you are collecting from your customers. It should also include how you use the information and your plans to protect it. Plus, depending on the state that you operate in, you need to take note of the local requirements for privacy policies.

For example, Californian law states that your privacy policy must be displayed as a stand-alone document. Meanwhile, New York demands that you detail the categories of information that you collect. Moreover, New York is one of the few places where you can get heavily fined for violating the law, so it’s important to disclose any contracts, operating agreements, and other documents for the sake of transparency. Of course, not every business is required to reveal all these, and one of the ways you can ensure transparency is by publicly registering your business as an LLC or incorporating it. Forming an LLC in the state also helps you in case there’s a data breach because of the legal protection an LLC provides. This type of business structure separates your personal and legal assets, protecting you should any breach of privacy policy contract happen. All LLCs across the country, as well as other business structures, like corporations, enjoy this benefit as well.

User Consent

Before you can take data from your customers, you first have to make them agree to the policies that you’ve created. For this, you need a consent form. For example, websites do this by asking if the user is willing to enable cookies on their page. Every device has a unique “component” that locks onto a user’s online activity. Cookies are tools on browsers that allow websites to get access to this “component.” If your company holds that kind of data, you can use it to understand your market better.

If you own an app, you have to put up a consent form on it as well. Stricter states like New York also mandate that you provide a consent form before the user registers for anything on your site that needs personal information, such as a newsletter or webinar.

Privacy preferences

This isn’t a legal requirement, per se, but it’s a good way to allow your customers better control over their data. Indeed, in our post ‘Why Consumer Data Privacy Is More Important Than Ever’, we emphasized that allowing your website visitors to decide what information they want to share and who they want to share it with is a great trust booster. For example, give them the option to turn off cookies. You can also allow them to keep their online profile private or give them a choice to only share the bare minimum information needed to use your services. If you can write multiple privacy policies for every circumstance, all the better. Not only will this let users understand the exact points that they’re agreeing to, but this will protect you from legal repercussions later on.

Users are wary about what companies do with their data. As such, it’s up to you to reassure them. Having all three of the points above shows that you’re aware of the consequences and are using them as responsibly as possible.

Ensure that Your Data Accumulation Strategy is Fully Compliant with All Regulations

The legality of collecting data has changed in recent years. The GDPR and various state laws have forced companies to take a closer look at their data collection processes. You must follow these laws carefully to avoid running into trouble.

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