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NZ Post Survey damned as breach of privacy rules

by Clio Francis and Shane Cowlishaw, stuff.co.nz

see http://www.stuff.co.nz/business/5164885/Large-scale-breach-of-privacy-rules-by-NZ-Post for full story.

A New Zealand Post survey that collected personal data to rent out to marketing companies has been damned as a "systematic, large-scale breach" of privacy principles.

The criticisms are made in two reports carried out for Privacy Commissioner Marie Shroff after concerned members of the public contacted her about the 2009 survey. The reports are to be published this week – just as this year's NZ Post survey starts arriving in 800,000 letterboxes and 125,000 email inboxes.

The 2009 survey asked participants 57 multi-choice questions, ranging from their names, addresses, preferred petrol station and favourite magazine to their mortgage rate, credit card limit and partner's income.

It also offered participants the chance to win cash, home entertainment and travel vouchers worth thousands of dollars if they completed the survey.

Once collected, the names and addressees of participants were rented out to "trusted, contracted commercial partners", both in New Zealand and overseas.

The information was also used, along with other data, to help compile a NZ Post marketing device called Genius, which promises to help clients "gain deeper insights and understanding into your customers, particularly around wealth, life stage and lifestyle".

It includes colour-coded maps classifying the population into 36 segments such as "cream of the crop", "work boots and boiler suits", "on the bread line", "Pacific blend" and "meat and three veg".

NZ Post rejects the findings of the reports, saying: "We utterly rebut every conclusion they come to. We are utterly confident and clear about the legitimacy of what New Zealand Post are doing."

The reports, by marketing and privacy law experts, were obtained by The Dominion Post after a request made under the Official Information Act.

Otago University law professor Paul Roth concluded in his report that the survey appeared to have breached "each of the four information privacy principles that relate to the collection of personal information".

"As a matter of policy, it seems undesirable that there should be such a systematic large-scale breach of the information privacy principles, whether or not this attracts any liability under the Privacy Act. It not only undermines and devalues the importance of protecting people's personal information ... but it brings the efficacy of the act into question.

"It may be that a change in the law might be necessary to deal with such surveys if they continue in their present form."

Auckland University former marketing lecturer Linda Hollebeek found several aspects of the survey's collection of personal information were unfair in terms of the market research code of practice and industry standards.

Many recipients would not be aware of NZ Post's role in compiling databases for commercial on-selling to direct marketers, she said. "As such, NZ Post appears to have exploited its shift in strategic direction to further its newly developed, more commercial purposes, which a reasonable consumer is likely to be unaware of."

The formal look and feel of the survey might also remind consumers of the official census form, which could lead participants to believe it was compulsory, she said.

Several recipients of the 2009 survey took to the NZ Post blog to complain: "Dodgy, trying to tempt you with some prizes", "Promptly binned – cheeky and invasive. They'll be onselling the data to all sorts of outfits to spam you."

NZ Post general manager integrated communications Sohail Choudhry said the company had listened to concerns raised by Ms Shroff about the 2009 survey when putting together this year's survey.

"The heading has been changed from `An Opportunity To Win' to `The New Zealand Post Lifestyle Survey 2011', so that it is very clear participants are taking part in a survey. The survey document has been amended to make it crystal clear participation is voluntary."

Ms Shroff said many people were very trusting when asked to give personal or financial details, perhaps encouraged by the chance to enter a competition or draw.

"When those personal details are being collected solely to on-sell to third parties, it is easy for there to be a blurring of legal and ethical duties ... It concerns me that the people providing the raw material for that profit are not fully in the picture."


Further to this story (from Stuff.co.nz via Dominion Post - see http://www.stuff.co.nz/business/5168934/NZ-Post-shouldn-t-call-it-a-survey)...

NZ Post 'shouldn't call it a survey'

 

MICHELLE DUFF
Last updated 05:00 21/06/2011
 

An amended New Zealand Post "lifestyle survey" that collects personal information to rent to other companies is in breach of the market research code of practice, a marketing expert says.

But New Zealand Post says the 2011 survey is clearly a voluntary collection of data for direct marketing and its legal advice is that it is completely fair.

Two reports carried out for Privacy Commissioner Marie Shroff have said the company's 2009 survey, distributed to 800,000 letterboxes and via email, breached privacy principles and was unfair in terms of marketing industry standards.

NZ Post made changes for the 2011 survey, based on customer feedback and advice from Ms Shroff.

But Massey University head of communications, journalism and marketing Malcolm Wright said that, while NZ Post may be within its legal rights to call the exercise a survey, it breached the Market Research Society of New Zealand's voluntary code of practice.

"They shouldn't call it a survey, they should call it an opportunity to join a direct mail database," Professor Wright said.

"It is market research, but it is also creating a direct mail database to be used for selling and that's against the code of practice, to mix the two up. There's definitely scope for confusion, no doubt."

NZ Post communications manager John Tulloch said it was stated numerous times in the survey that completing it was not compulsory and the information could be used by other companies.

"We are quite clear – if anything, NZ Post goes above and beyond in being transparent about what this is. We are very keen to ensure there is best practice in the collection of marketing data."

Part of NZ Post's business, as laid out in the State Enterprises Act, is to engage in direct marketing services.

Marketing Association public affairs director Keith Norris said there was nothing "sinister" about the marketing.

"I think the confusion is that it is NZ Post, and people see NZ Post as some secular government organisation. They're not, and like any organisation they have to earn their keep, otherwise we're bailing them out with our taxes."

Ms Shroff said it was important that people realised what their data was being used for.

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