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210 Part 1 Introduction

Notes:
Identity fraud cases include cases of false identity and identity theft.
Application fraud/false insurance claim relates to applications or claims with material falsehood (lies) or
false supporting documentation where the name has not been identified as false.
Facility takeover fraud occurs where a person (the ‘facility hijacker’) unlawfully obtains access to details of
the ‘victim of takeover’, namely an existing account holder or policy holder (or of an account or policy of a
genuine customer or policy holder) and fraudulently operates the account or policy for their own (or some-
one else’s) benefit.
Asset conversion relates to the sale of assets subject to a credit agreement where the lender retained own-
ership of the asset (for example a car or a lorry).
Misuse of facility is where an account, policy or other facility is used fraudulently.
Source: CIFAS (2008)

While identity theft is traumatic for the person who has their identity stolen, in the majority
of cases, they will eventually be able to regain any lost funds through their financial services
providers. This is not necessarily the case for the e-retailer. In the first part of 2008, CIFAS
members reported 104,548 cases of identify theft to a potential value of £431,967,984.

Why personal data are valuable for e-businesses

While there is much natural concern amongst consumers about their online privacy, infor-
mation about these consumers is very useful to marketers. Through understanding their
customers’ needs, characteristics and behaviours it is possible to create more personalized,
targeted communications such as e-mails and web-based personalization about related
products and offers which help increase sales. How should marketers respond to this
dilemma? An obvious step is to ensure that marketing activities are consistent with the latest
data protection and privacy laws. Although compliance with the laws may sound straightfor-
ward, in practice different interpretations of the law are possible and since these are new
laws they have not been tested in court. As a result, companies have to take their own busi-
ness decision based on the business benefits of applying particular marketing practices,
against the financial and reputational risks of less strict compliance.
Effective e-commerce requires a delicate balance to be struck between the benefits the
individual customer will gain to their online experience through providing personal infor-
mation and the amount and type of information that they are prepared for companies to
hold about them.
What are the main information types used by the Internet marketer which are governed
by ethics and legislation? The information needs are:

1 Contact information. This is the name, postal address, e-mail address and, for B2B companies,
web site address.
2 Profile information. This is information about a customer’s characteristics that can be used
for segmentation. They include age, sex and social group for consumers, and company
characteristics and individual role for business customers. The specific types of information
and how they are used is referenced in Chapters 2 and 6. The willingness of consumers to
give this information and the effectiveness of incentives have been researched in Australian
consumers by Ward et al. (2005). They found that consumers are willing to give non-
financial data if there is an appropriate incentive.
3 Platform usage information. Through web analytics systems it is possible to collect infor-
mation on type of computer, browser and screen resolution used by site users (see Chapter 7).
For example, Figure 4.7 shows detail collected by a widget installed on Dave Chaffey.com. As
well as the platform used, the search term referred from Google is shown. Many Internet users
will not realize that their visits are tracked in this way on virtually all sites, but the important
point to know is that it is not possible to identify an individual unless they have agreed to give
information through a web form and their profile information is then collected which is the
situation when someone subscribes to an e-newsletter or purchases a product online.