Understanding Compliance In Call Centers: Navigating Data Privacy Laws

Any inbound call center is bound to collect large quantities of customer data. In some cases, this might involve sensitive financial information, including credit card and banking info. In other instances, it might involve personal, demographic, or even health-related data points. Some level of data collection is paramount for any inbound call center that wishes to serve its customers effectively.

When dealing with this data, however, there are some risks to be aware of. One of the foremost risks is falling out of legal compliance. There are a number of laws and regulations pertaining to data privacy, and these laws can have significant implications for call centers.

In recent years, data privacy has become an increasingly major focus among consumers. This surge in interest is largely a reaction to “cookies” and other methods for harvesting data online. As data privacy has reached the forefront of public consciousness, a number of countries, states, and municipalities have passed legislation to govern data privacy.

Of course, not all of these laws are directly relevant to call centers… but nevertheless, it’s important for any call center to be mindful of the broader regulatory landscape. There are several specific reasons why data privacy laws matter for inbound call centers, including:

Again, call centers handle large volumes of sensitive data. Adhering to data privacy laws ensures certain safeguards are in place, minimizing the risk of that sensitive data being hacked or breached.

Because data privacy has become such a significant issue among consumers, most call center customers are going to expect a high level of compliance. Going the extra mile to protect consumer privacy can be a good way to foster goodwill and engender trust.

Of course, one of the most obvious reasons for a call center to emphasize data privacy is to avoid any issues that might arise from non-compliance. In some instances, the consequences for non-compliance can involve significant fees.

If a call center does lose sensitive customer data, it’s bound to make the headlines, which can result in major reputational damage. Again, following data privacy laws is a good way to minimize risk.

Finally, note that following data privacy laws does not have to be onerous. In many instances, adhering to the law can actually help to streamline operational efficiency, providing standardized methods for data-handling that can make your call center run frictionless.

There are a number of data privacy regulations that can affect call centers; because these laws can vary by jurisdiction and by industry, and because laws are fluid and subject to change, it’s always important to do some research and perhaps even talk with an attorney.

Having said that, here are some of the most consequential data privacy laws that have ramifications for inbound call centers.

In many ways this is the flagship data privacy law, well-known throughout the world. Applicable in the European Union, GDPR has provided the model for data privacy protections in other parts of the world. Basically, this regulation establishes clear rules to govern data collection, management, and storage. Customer consent is a big emphasis in this law, as is the right for customers to delete any stored data at their discretion.

This law provides residents of California with certain rights concerning their personal information, largely modeled on the rights enshrined in GDPR. These protections include the right to know what data is collected, the right to delete data, and the ability to opt out of any sale of personal data.

HIPAA is a big one, especially for call centers that deal with healthcare information. Essentially, HIPAA exists to ensure that patient data is kept confidential and secure.

This law, relevant throughout the United States, regulates telemarketing calls. The most noteworthy provision is that it compels companies to obtain consent before making calls or sending texts.

This Canadian law governs how private sector organizations collect and implement personal information, specifically with respect to commercial activities.

The DPA works in harmony with the GDPR, specifically in the UK, to ensure added regulations for personal data handling. Call centers operating anywhere in the UK will want to keep the DPA top-of-mind.

New York residents enjoy enhanced data security protections via the SHIELD Act, which requires businesses to implement reasonable safeguards against data breaches.

Again, it’s important to remember that there is an ever-shifting regulatory environment that includes international, federal, state, and local laws, so always ensure you’re up to date with the latest regulations that could affect your call center.

We’ve seen that there are a number of data privacy regulations that affect call centers, and that there are many reasons why compliance matters. Now we come to a practical question: What steps can call centers take to ensure adherence with relevant ordinances?

There is no blueprint or magic formula here, but there are a few guidelines and best-practices that can help any call center avoid non-compliance issues.

• Make sure you’re familiar with relevant laws and regulations – It can’t be stressed enough: Doing your own research and due diligence is key. Reaching out to a lawyer who knows your jurisdiction and your industry may be more than worthwhile, particularly if it keeps you from making any costly legal snafus.
• Review your data collection practices – Be aware of the types of information you’ll need to collect from consumers, and the legal grounds you have for collecting it. Check relevant laws and regulations to find out what steps you must take in order to gather consent.
• Ensure robust data security – Simply adhering to the basics of cybersecurity can go a long way toward preventing customer data loss. Encryption, secure access controls, and regular audits can all be helpful for ensuring user data is safe and sound.
• Consider the rights of your customers – As you review pertinent regulations, notice that many of them enshrine rights for your customers to access, correct, or delete the data you’ve collected from them. Be sure you understand these rights, and have mechanisms in place by which customers can easily exercise those rights.
• Train your employees – Your call center employees are likely to be the ones who are directly obtaining and managing customer data. To ensure compliance with data privacy laws, it’s imperative that you provide your employees with rigorous training.
• Establish data retention policies – Another important way to keep your call center compliant is to establish protocols regarding how long you’ll retain customer data, and what your process will be for deleting it in a timely and secure manner.
• Ready an incident response plan – Even with your best efforts to safeguard customer data, a breach or loss may happen. One way to mitigate the damage done is by ensuring you have an incident response plan ready to employ. Your incident response may encompass legal remedy, PR moves, and more.
• Don’t forget your third-party vendors – It’s not uncommon for call centers to lean heavily on third-party partners, which may include cloud storage companies, CRM vendors, and beyond. Before you outsource to any vendor, vet them for their own data privacy protocols, ensuring they’re just as vigilant as you are.
• Focus on transparent communication – Be prepared to clearly outline your data privacy protocols for your customer, and to address any questions that may come up about data usage.
• Review your data policies regularly – Finally, remember that both the law and your industry are ever-changing. Make it a point to audit your data collection policies and to revise them as needed.

These are just a few steps to consider as you seek to uphold full legal compliance at your inbound call center.

While it’s certainly important to be proactive about data privacy compliance, it’s also important to use all the available tools for mediating legal liability issues. Essentially, this is a matter of minimizing risk exposure, should your call center be found with a legal infraction.

So what steps should call centers take to shore up their legal bulwark? One important step is to register as a Limited Liability Company, or LLC.

An LLC is one of the most popular business structures in the United States. Essentially, registering your business as an LLC establishes it as its own unique legal entity, separate from its owner. This makes it possible to distance yourself and your business partners from the company itself, keeping personal assets and liabilities separate from your business assets and liabilities.

The upshot of this is that you can limit your personal liability should your LLC be caught up in a legal issue, including penalties for non-compliance with data privacy laws.

There are a number of reasons why a call center business might wish to register as an LLC: Pass-through taxation, ease of administration, flexible managerial structures, and more.

But by far the most important advantage is the legal protection. Simply put, registering as an LLC significantly limits the blowback you might experience if your business is embroiled in a lawsuit, or otherwise lands in legal peril due to an issue with data privacy or something else.

LLC registration can be an important safeguard should your business experience any kind of customer data loss or related mishap.

The actual process for registering your call center as an LLC may vary from one state to the next, but the general outline looks something like this:

• Select a Registered Agent – Every LLC needs to have a Registered Agent who can receive legal correspondence on the business’ behalf. This needs to be either an individual or an organization with a physical mailing address in the state where you’re registering.
• File Articles of Organization – Articles of Organization is the general name given to the legal document that you file with your Secretary of State, officially creating the LLC. There is usually a fee attached to this, and depending on the state it may be anywhere from $20 to $300.
• Make an Operating Agreement – Your Operating Agreement outlines how you share duties and allocate revenues between yourself and your business partners. You’re not required to have one, but it can help you mediate any legal friction down the road.
• Double-check state-specific rules – Again, it’s important to remember that LLC laws can change by state, so do your due diligence! For instance, if registering in the Sunshine State, it’s important to research how to form an LLC in Florida.

The LLC is not the only legal structure that can mitigate your call center’s legal liability, although it may be the best one.

The alternative is to incorporate. Running your call center as a Corporation requires you to sell ownership shares and to assemble a Board of Directors. While Corporations do offer a high level of legal protection, they also come with a lot of other regulatory concerns, which might make it a less appealing option than the LLC.

No matter which formulation you choose for your call center, though, it’s crucial to understand the ways in which your legal structure can help you mitigate legal liability, especially with respect to data privacy laws.

Data privacy is a huge issue for consumers everywhere, and has a ton of legal implications for call centers. When operating a call center, it’s important to stay abreast of what these legal implications are, and what practical steps you can take to maintain full compliance. Also be aware of the legal tools available to help limit your liability and minimize your exposure to risk.