Consumers need to know what the trade-off is when using online services before they hand over personal data, says the Communications Consumer Panel (CCP).
The majority of consumers are concerned about online privacy and need to know what benefits they are trading their personal information for, says Bob Warner of the CPP.
"Our new research project looking at how online personal data is collected and used is uncovering worrying findings," he told the Westminster Media Forum seminar in London.
Consumers lack knowledge
The research reveals that 60% of consumers are concerned about online privacy, but while many say they are responsible for controlling their data, they have low awareness of how their data is collected, he said.
The gap seems to be in consumers' understanding of what their personal data is used for, said Warner.
"Without this knowledge they cannot make informed choices between on the one hand, withholding their data and protecting their privacy, and on the other hand, sharing their data and receiving benefits," he said.
Share the benefits
Warner called on companies to explain to consumers the benefits that can result from sharing data, such as more personalised services and lower prices.
"We don't want to see confidence in e-commerce and other online services undermined," he said, which is why companies must tell consumers in a simple, straightforward way what data they collect, who they share it with, how long they hold it for and how they prevent it being misused.
According to Warner, consumers are looking for confidence. "There will be competitive advantage for those companies that can reassure consumers their data is protected.
Even if consumers understand that they are making a trade-off by signing up to free online services, they do not necessarily understand exactly what that involves, he said.
For economic success, consumers need to have the information they need to make an informed decision, there needs to be an easy means to control what information they share, and there needs to be confidence the organisation concerned will respect the agreement, said Warner.