Did you know that some of the recently adopted Australian privacy laws target online business owners directly?
To see if you need to be paying attention, read the entire article or click the Play button above to listen to the podcast.
Meet the Super Savvy Business Word of the Week podcast guest, tax expert Warren Black:
Warren has worked in the Australian Tax Office as an Auditor in the Tax Audit Division for about 15 years before deciding to start his own business as a specialist in taxes and as a commercial lawyer.
Warren has heaps of experience in tax planning, asset protection, commercial law and international tax. He is the man who can show you how you can pay less money to the tax man and keep the gold digging “scumbags” away from your money and assets.
During our interview, I was taken back by what Warren had to say regarding these new privacy laws:
“Most businesses now are going to have to probably have an expert in privacy or other lawyer who regularly checks this stuff. That’s what I reckon the result is going to be.” – Warren Black
Who needs to be paying attention to the new privacy laws?
What these laws do is they divide businesses in two: the ones which have a turnover bigger than $3 million, and the ones which have a turnover under $3 million.
If you are in the first group, you will definitely have to pay attention to this. Those businesses from the second group are NOT, in theory, going to be affected.
But there are some exceptions:
- if you have related entities that are covered overseas with that kind of turnover
- if you are related to companies that make that kind of turnover
- if you do joint ventures [a common practice in online marketing]
- if you trade lists (“if [your business] makes money or gains other benefits from disposing personal information”)
- If you have any kind of affiliations overseas
“So, although in theory anyone under $3 million is going to be okay, that is a very broad exception that is going to catch a lot of online businesses” – Warren Black
Do you want fries with that?
On top of that, these new rules declare war on the up-selling models: if online and a business, you may offer a certain price for something. When people sign up for the offer and they get upsold to something else, you may get into trouble.
Unless there is a lot of disclosure as to why you’re doing this, you will be targeted as practicing bait advertising. “Do you want fries with that?” is what they are alluding to. Offline businesses do that, but as online business owners we are being targeted when someone is checking that and we are doing this…
“It is insane; it is like… wow! I mean, I read it and I just checked my head and I thought regulation is just going insane and nothing in this country has gone worse” – Warren Black
The good thing in all this seems to be that the regulators seem to be distinguishing between upselling and offers, and that seems to be ok. But again, these things leave a lot of space for discussions.
“So if I don’t like you I can kind of target you and give you a hard time, but they do say that upselling is essential, and that is okay. But in saying that it certainly shows that is more scrutiny than ever before and companies have got to get it right. And that is, unfortunately, the way it is”. – Warren Black
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The main things that apply in the online space that you need to be aware of:
1. Outsourcing to 3rd parties
I have an entire team working with me from overseas, Eastern Europe. I am not the only one; a lot of online business owners have discovered the financial advantages of hiring offshore, especially in Eastern Europe, India and the Philippines: it cuts on costs and it cuts on compliance with work cover.
At the same time, the problem with these companies, according to Warren, is that they don’t necessarily have to have the same attention for details with privacy. So what the new principles are saying is that:
- If you are a business that outsources to a company overseas…
- If you are giving that company your clients’ private info…
- If that company reaches out to that info and does bad things with it…
- … you are going to be held responsible.
As Warren puts it, you will be considered guilty until proven innocent. The only way you can avoid being deemed liable is if:
- You get the explicit consent of your client to actually provide their info to outsourced/offshore people.
- You have to cover this in your privacy agreement.
- You have to have a clear drafted contract with the off-shore provider in which they agree to apply to the privacy things
- You also have to make sure that Dropbox, Google Docs or any other software of the kind you are using also complies with these rules
- You are advised to keep a copy of the (let’s say) Dropbox Terms and Conditions to prove that they comply with the new laws
2. Using lead captures on your website
Lead captures = taking someone’s name and email address through a 3rd party autoresponder service.
Lead captures will be affected by the new laws, but the situation is not that grave. You can still ask people for their details but you have got to be able to show that there is reason necessary to have the data. So if you are asking people for their name, email address and address because you are selling products, that is fine.
Some useful guidelines:
- Make sure that the 3rd party company you are using is compliant with the new rules (the same as with Dropbox)
- Don’t ask for information upfront if you don’t need it
“Practically, the laws are not completely terrible”, says Warren at some point during the interview. “But in saying that, I think – on the strict reading – the potential enforcement is horrid. That’s my summary.”
3. The placement on your website of the Terms & Conditions and Privacy Agreements
It is advised that you talk to someone, a professional, who knows how your business should exactly comply to these rules. By and large, it is the sloppy businesses that are going to be targeted.
As long as you have the necessary paperwork at hand you are less likely to be deemed guilty. Do not embrace the attitude of “It won’t happen to me”. I did it once and I learned the hard way that this is not the attitude one should have in regards with their business.
“I think it is absolutely imperative now like never before that if you are an online business owner you have very clear Terms & Conditions and Privacy Agreements” – Warren Black
How to contact Warren Black:
If you think this news affects the online businesses of your friends and acquaintances, let them know how they can protect their assets: