Selling and marketing products and services online is a great way to connect with new consumers, maintain communications with existing or old ones and expand a business’s footprint, but attempting to do so without fully understanding the rules and regulations in these areas can have serious legal repercussions. Here’s a look at what today’s business owners need to know about conducting business and e-commerce over the Internet to ensure they stay on the right side of the law.
Building a Business Website: The Basics
In creating modern commercial websites, today’s business owners must first determine what they are looking to get from the site. A strictly informational site that doesn’t actually sell anything can be relatively easy to get up and running, while an e-commerce site requires a longer, more intensive process. Most people looking to conduct business online choose one of two options. They either join an existing community site where they can then sell their products and services in exchange for a fee or percentage of sales, or they create their own e-commerce sites through which to do the same via an online store. Either way, retailers must register an unused domain name, create the site itself and buy space from a webhost. Furthermore, they will have to implement some type of ‘shopping cart’ feature customers can use to conduct credit card transactions, although it will likely differ from credit card processing software used in regular, non-e-commerce retail locations. This is due to the fact that fraud is more prevalent online. Most online businesses accept credit cards by using one of two methods. They either partner with a third-party transaction processer, or they utilize the online payment system PayPal.
Considerations in Keeping Customer Data Safe
Among the problems facing the current e-commerce industry is the prevalence of fraud and customer data breaches. Because conducting online transactions often involves the use of personal information, such as Social Security and credit card numbers, the Federal Trade Commission urges online retailers to assess what type of personal information they collect from customers, rid themselves of any information they don’t need and make efforts to safeguard the information that is, in fact, necessary for conducting transactions. Failing to do so and experiencing a data breach will, at best, diminish a consumer’s faith in a business, and it could also lead to a potential lawsuit.
After determining what customer data is considered sensitive, there are a number of steps business owners can employ to help keep it secure. In addition to keeping digital and physical documents in locked areas where access is extremely limited, it is recommended that business owners ensure their workers log off their computers at the end of each shift and encrypt any sensitive information before distributing it to other parties. Business owners are also urged to create a secure general network and to see that all employees use strong passwords that are changed at regular intervals. It’s also important to restrict outside access to company wireless networks and to invest in one of any number of systems designed to identify data breaches through tracking unusual activity.
What to Do When Data Breaches Occur
Data breaches manifest in a number of different ways. An outside party hacking into your computer or networking system, a criminal engaging in ‘skimming’ efforts to obtain sensitive information or insiders taking advantage of access to sensitive information are all examples of types of data breaches today’s businesses may face. Regardless of the type of breach experienced, the best way to approach it is by taking immediate action. When a data breach occurs, the first step should be placing a call to local authorities (in most states, this is mandatory). In some cases, other organizations, such as the U.S. Postal Service, may need to be contacted, depending on the nature of the breach, and banks and credit unions may need to be contacted in the event that the breach includes other customer data. Finally, most states have laws dictating that customers must be informed promptly of any data breaches. It is best to explain the breach in as much detail as possible, offer instruction on steps affected customers should take (canceling credit cards, for example) and, if necessary, encourage affected individuals to file a complaint about the breach with the FTC.
In today’s crowded online and e-commerce marketplace, security issues will inevitably arise. Businesses are least susceptible to security breaches and related concerns when they implement steps to keep customer data safe, train their employees in protecting sensitive data and respond promptly and forcefully to any known data breaches while taking care to inform the proper parties.
Legal Disclaimer
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.