Understanding common privacy regulations

If you’ve ever been to the doctor, you’ve received a stack of documents outlining the Health Insurance Portability and Accountability Act (HIPAA). This federal law protects your personal health information and regulates how it can be handled. As a patient, you are required to provide your consent before a health care provider can share your records, which protects your confidentiality and privacy.

On the credit side, the Fair Credit Reporting Act (FCRA) requires credit reporting agencies to get consumer consent before they share their information with third parties. When they do have this permission, the FCRA also requires these agencies to confirm they are sharing accurate consumer credit information, which provides a layer of protection against credit fraud.

The Children's Online Privacy Protection Act (COPPA) is a federal law designed to help protect the youngest consumers. It requires website operators to gain parental consent before they collect personal information from children under the age of 13. It also gives parents the right to review and delete that information.

The California Consumer Privacy Act (CCPA) is another significant privacy law that impacts California residents. Enacted in 2020, it gives them the right to know what personal information is being collected about them, how to opt out of having their information sold, and how to request that an entity deletes their personal information. While limited to California residents, other states are looking into passing privacy laws similar to CCPA, including New York, Colorado, Virginia and Washington.

A European Union (EU) regulation called the General Data Protection Regulation (GDPR) requires companies to obtain consent before they can collect or use the personal data of consumers, including U.S. citizens living in an EU member country. It also protects U.S. citizens making transactions with EU-based businesses.

Finally, the Electronic Communications Privacy Act (ECPA) requires law enforcement to obtain a warrant before they can access someone’s electronic communications, including messaging and email.

The impact of privacy regulations

Privacy regulations offer many benefits for consumers. One of the most notable is the right to control their personal information held by companies. They are allowed to access it, make changes or corrections to it, and remove it from company records, which puts them in control.

Companies also must reveal to consumers how they plan to collect, use and share their personal information so consumers are empowered to take their business elsewhere if they are not in agreement with a company’s policies.

Another benefit is the promise of greater data security. Some regulations put the burden on companies to take reasonable measures to protect consumer data. This helps prevent cybersecurity incidents that result in data breaches, ultimately helping keep the personal information of consumers safe from unauthorized access. When companies fall short, privacy regulations also hold them accountable. Companies in violation are often met with fines and other penalties, which provide them with an incentive to comply.

From a convenience standpoint, privacy regulations can help reduce the amount of marketing materials that consumers receive from companies. By requiring an opt-out option, consumers have the power to cut back on unwanted or excessive marketing promotions, whether they come via email or the postal service.

For businesses, privacy regulations dictate how they can collect, store and use consumer information. This results in expenses related to developing, implementing and updating privacy policies. This becomes even more costly if companies don’t comply and incur expensive legal penalties and fines.

Of course, an organization’s reputation is also at risk if it doesn’t comply with privacy standards and take data security measures, so it pays for businesses to comply.

Understanding their limitations

In a perfect world, businesses' privacy regulations would provide foolproof protection for consumers. In practice, however, it’s more complicated than that.

First, privacy regulations can be difficult to enforce. There’s no single governing body keeping tabs on all businesses and their compliance, so there’s no guarantee that every company a consumer transacts with is following every regulation. In fact, some simply don’t. Even if they are found to be in violation, the consequences in place might not be significant enough to ensure their compliance.

Because different regulations cover different kinds of personal data, it can be hard for consumers to know what is protected and what is not. And at the rate technology is changing, privacy regulations are always playing catch-up. Bad actors are paying attention to these gaps and may exploit them to gain access to personal data that isn’t protected.

Because of these limitations, consumers need to remain vigilant and take an active role in protecting their private data from unwanted eyes.

Protecting your personal information

Fortunately, there are many things consumers can do to make sure their data doesn’t fall into the wrong hands.

The first one is tried and true, but it bears repeating. Use strong passwords and use different passwords for different accounts. Strong passwords — such as a string of random, unrelated words of 12 characters or more — are the most secure when you’re setting up an account and are more difficult for hackers to crack. While it may be easy to remember a password based on your birthday or family members’ names, it’s also easy for bad actors to guess them, especially if you share personal information on social media platforms that are easy to access.

Be careful with emails you receive, too. Cybercriminals often gain access to personal information through phishing attempts. Phishing is a scam in which an attacker sends a legitimate-looking email that requests personal information or perhaps contains malware. Because the email looks real, many consumers are tricked into sharing sensitive data or opening links or attachments that can infect their computer or phone and steal their personal data.

To help protect your information, make sure to keep software updated on all your devices, including your mobile phone. These software updates contain patches to any vulnerabilities and offer the latest security available. It’s also important to review your privacy settings on any apps you use to limit the amount of personal information you may be sharing.

In addition, be sure to use only secure Wi-Fi networks when you are looking at your sensitive information online, such as when you are accessing your bank or credit card accounts.

Finally, it’s a good idea to get in the habit of checking your financial accounts regularly for signs of unauthorized activity. Banks, credit card companies and other financial institutions may offer fraud services, so be sure to report anything suspicious immediately. Some consumers like to have the added protection that credit fraud monitoring services offer, too. These paid services will monitor your credit report for signs of unusual activity — such as new accounts opened in your name, changes to your address or large purchases — and alert you to any potential threats.

Looking ahead

Privacy regulations are constantly evolving to offer the best protection for consumers’ personal information. Because these regulations are not comprehensive, consumers should also play an active role in safeguarding themselves by following best practices for securing their data. Doing so will help provide them with the protection they need in an increasingly digital world.