By Don Peppers and Martha Rogers, Ph.D.

When civil libertarians skewered Veda Advantage--the primary credit-reporting agency for Australia and New Zealand--with a Big Brother Award, the company hit a low point in public relations. The Sydney-based corporation's subsequent garnering of a top consumer award is a case study in how a privacy strategy can deliver bottom-line business results.

Who is Veda Advantage? Think of it as the TransUnion of Down Under. Founded in New Zealand in 1967 as the Credit Reference Association of Australia, the company began as a small mutual credit checking company. Through a series of mergers and acquisitions, the enterprise expanded into New Zealand and, by the late 1990s, had become the region's largest credit-reporting agency.

Today, Veda's 800 employees generate $1.4 billion in annual revenues by reporting on the credit status of 60,000 people per day, according to its Web site. The company is reportedly custodian to a database of 13 million individuals and one million businesses.

But what was it that led to Veda--then called Baycorp--incurring the Big Brother moniker in 2004? The tension between Veda and consumer advocates had started to build more than a decade before, when Veda saw advocates backing legislation inimical to its interests. The company subsequently disengaged from direct contact with the advocates, and the consumer complaints started to mount.

"By the time I started in 2004," recounted Chris Gration, Veda's head of external relations and privacy, to Inside 1to1: Privacy, "we were being criticized in the press every other week."

According to the Auckland Council for Civil Liberties, heralds of the Big Brother award, Veda was failing on three counts: not correcting inaccurate data, charging high fees for data access, and opposing the efforts of the New Zealand Privacy Commissioner. Indeed, a small 2004 assessment by the Australian Consumers Association found up to a third of Veda credit reports contained errors ranging from misspelled names to inaccurate job listings.

And what catapulted Veda from this low point into the good graces of consumer advocates? Gration points to the 2004 arrival of new CEO Andrew Want. He said Want believed Veda's most important obligation was to be a good custodian of consumers' data.

"He told us a strong privacy reputation was the basis of our entire reputation," Gration said.

To implement Want's vision, Veda launched two major initiatives. The first was to re-engage the consumer advocates. According to Gration, in late 2004 Veda established a Consumer Advisory Forum that systematically worked through a list of consumer grievances. Veda improved data quality- - which it says was always better than advocates claimed, just never measured. Veda also started an industry body for data governance, enlisted in an industry ombudsman scheme for consumer complaints, and worked with regulators to ease access to consumer reports.

"You no longer see any negative press about us," Gration observed.

The second prong of Veda's strategy was to spearhead public debate on privacy. To this end, Veda funded a program -- the Privacy and Trust Partnership Project -- to gather the leading privacy voices in Australia and New Zealand. Its driving purpose was to rethink the application of OECD fair-information principles within the twenty-first century context. To guide this initiative, Veda hired the consulting firm, Information Integrity Solutions Pty Ltd, headed by former Australian privacy commissioner Malcolm Crompton.

"The Privacy and Trust Partnership project indicates the commitment shown by Veda and its foresight in initiating a project that provided global thought leadership," Crompton told Inside 1to1: Privacy.

"Others, such as the UK Information Commissioner, are now seeing a similar need to take a more fundamental look at the frameworks for the governance of personal information in the twenty-first century."  

Veda's rejuvenated privacy strategy yielded quick results. Just one year later, in July 2005, the Consumer Federation of Australia (CFA) named Veda winner of its Asher Award for "making the most significant contribution to consumers in the past year."  

Since then, the Privacy and Trust Partnership Project has issued two influential white papers, hosted a parliamentary forum, and held meetings with the Australian government. The program's long-term goal is to help shape the privacy proceedings within APEC, as well as contribute to the global privacy debate.

The payoff to Veda's shareholders will be direct and significant. The more trusted its brand, the more likely governments and consumers are to trust it with access to new data.

You can reach Don Peppers and Martha Rogers at dpeppers@1to1.com or rogers@1to1.com