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Your business will likely deal with large amounts of data, both your own and that of your customers. If any of this data can identify a living individual, it qualifies as personal information, and you are the agency that collects this information. As an agency, you have specific legal requirements that regulate how you handle any personally identifiable information, particularly around how you collect it. When dealing with large amounts of this kind of data, it can be hard to keep track of, particularly if you store it in multiple locations. Therefore, it is beneficial for you to limit customer data collection in your business. Indeed, this article will go through three reasons why you should limit customer data collection as much as possible.

1. The Law Requires It

Any organisation that collects personal information is an agency. Therefore, they are bound by New Zealand privacy law. This law operates on privacy principles, which regulates data:

  • collection;
  • storage;
  • security;
  • usage;
  • disclosure; and
  • disposal.

In particular, when you collect any customer data, you need to ensure you do so:

  • with a clear and legal purpose that you communicate to your customers;
  • while informing customers of this fact;
  • from its direct source;
  • unintrusively; and
  • lawfully.

Collecting Data With a Purpose

When you collect personal information from customers, you can only collect the information you need to fulfil your intended purpose. You cannot collect excessive or unnecessary data outside of this purpose. At the time of collection, customers need to know you are collecting this information and why. You can outline this in your privacy policy.

For example, you may need to collect a customer’s physical address to deliver goods. However, you cannot collect other unnecessary identifiable contact information, such as their email address, as you do not need it to complete delivery. If a customer thinks you have collected personal information you did not need, they can make a complaint to the Privacy Commission. The Privacy Commission will then investigate, and depending on what they find, can:

  • issue compliance notices and fines; and
  • recommend cases to the Human Rights Review Tribunal.

Your purpose for collecting customer information does not need to be absolute, but you need to prove it when prompted. Furthermore, you need to be able to clearly explain why such information collection was necessary.

2. There is Less Information to Monitor and Maintain

If you store your customer data online, you may use a cloud storage system or similar to do so. The more data you have, the more space you need, and the more money that may cost to use your storage software. If you limit data at the time of collection, you can save on storage costs further down the track. 

For example, say you run CCTV at your business premises. The more you record, the more video footage you need to store. Consider what areas need surveillance and the most critical times for doing so. Limit footage to those times of operation. 

You must ensure any personal data you store is secure. NZ privacy law requires that you implement reasonable security measures according to the nature and volume of the personal information you hold in your business. The less data you intake, the less data you have to keep safe.

The less data you have also means you have less to dispose of when the time comes. You can only keep personal information for as long as it fulfils its intended purpose. Once that is done, you must dispose of it securely. For example, shredding important physical documents or wiping hard drives. This will be significantly more efficient if there are fewer data sets to dispose of in the first place.

3. Lower Risk in a Data Breach

A data or privacy breach refers to any situation where an unauthorised person has accessed or mishandled your data, or something is preventing you from accessing that information. Whenever you operate online, there is a risk of a cyberattack on your business, like a denial-of-service or malware attack. The more information you have available, the higher the risk of such an attack.

Therefore, if you limit the information you collect, there is less available information for malicious actors to get a hold of. In particular, if you limit the amount of personal information you collect, there is less chance of a customer’s privacy being interfered with. This reduces potential legal consequences for your business. 

Key Takeaways

If you think carefully about how much customer data you need and limit intake to only what is necessary, you can optimise your business functioning. When you limit customer data collection, you are more likely to keep in line with your legal requirements as an agent, limiting potential information loss in a data breach. If you would like more information or help with your data collection procedures, contact LegalVision’s IT lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

How do you collect data from customers?

You collect data from customers whenever you collect their information. This includes contact details, address details, or financial details.

What should I do to protect customer data?

How you protect customer data will depend on its form. You should lock up physical files of customer information and implement adequate security measures for digital data, such as encryption and anti-virus software.

What is personal information?

Personal information is any information about an identifiable individual. Therefore, personal information is data you can use to identify a living person. Examples include names, addresses, or certain financial details.

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