90% of Cases of Lost or Stolen Private Data Unreported by British Firms

New independent research from StrongMail Systems, Inc. provider of commercial-grade, on-premise solutions for marketing and transactional emailn reveals the loss or theft of private and confidential data is endemic amongst UK firms, with almost two-thirds of marketing professionals experiencing a data breach involving the loss or theft of consumer information over the past 24 months. In 90% of cases the loss or theft went unreported since they felt that they were not required to, or were unsure whether they had to, report the incident to customers.

These are key findings of a the 2008 UK Study on Email Marketing Practices & Privacy that surveyed more than 900 UK data protection professionals and marketing professionals was conducted by the Ponemon Institute and commissioned by StrongMail.

The issue is exacerbated by firms who choose to outsource marketing functions to third parties. According to the marketing professionals surveyed, data breaches were 42% more likely to be attributed directly to third parties than to in-house personnel illustrating the high stakes of outsourcing marketing campaigns for reasons of perceived cost savings or efficiency gains.

The survey found that email marketing poses a big risk to the privacy of UK consumer data, ahead of Internet, telemarketing and direct mail outbound marketing channels. Email marketing, one of the most pervasive modern marketing tools, has traditionally been a function handed out to specialist email service providers (ESP). Among UK firms who outsource their email marketing, the incidence of data breaches rises from 61% to 78%, a 28% relative increase.

Paul Bates, managing director of StrongMail UK, said: “A cavalier attitude towards outsourcing customer data to third-parties combined with complacent processes for keeping that data safe is a recipe for disaster. The fact is confidential customer data doesn’t travel well and providing it to third-parties for outbound marketing purposes can, as the research shows, be a risky proposition. This data is extremely valuable to most firms, and we advise them to think very carefully about how they keep it safe.”

Larry Ponemon, founder of the Ponemon Institute and author of the study, offers a silver lining to the issue: “Although 60% of UK marketers outsource their e-mail marketing today, 65% would consider in-sourcing their e-mail marketing campaigns to ensure greater protection over personal data. The message is, albeit slowly, getting home.”

The get the full research report 2008 UK Study on Email Marketing Practices & Privacy (after registration)