Boldly defying the privacy concerns of banking regulators, an Internet startup called Encirq Corp. is collecting reams of consumer transaction data and building potent consumer profiles for direct marketers.

But the company says it will not inspire regulatory fury because the profiles never leave consumers' personal computers.

"We are wearing the whitest of hats when it comes to privacy," say Mark Vogel, co-founder and chief executive officer of Encirq, which plans to introduce its service today.

The centerpiece of San Francisco-based Encirq's strategy is to let consumers interact with their credit card statements through the Internet in several ways. Each bill will have links to the Web sites of the merchants appearing on the statement, as well as links to advertisements that offer incentives for shopping at the merchant again.

The statements will also provide detailed information about each transaction, including the address and phone number of the merchant and the date of the purchase. Mr. Vogel said these features should cut down the number of customer service calls: More than 10% of credit card transactions result in a customer service call, usually because consumers do not recognize the merchant or remember making the purchase.

Encirq is peddling its technology to financial institutions, saying it will pay them for each customer who signs up for an Encirq-enhanced statement. The company is also wooing merchants, from whom it is garnering advertising fees.

Peter Bond, director of business development of Priceline Web House Club, said his company is considering working with Encirq. "We could target someone who shops at A&P, for example, by designing a rule system that would say, 'Send our message to anyone who shops online and shops at the following stores,' " Mr. Bond said.

Encirq has also armed itself against the inevitable questions from privacy advocates.

Mr. Vogel, a former Bank of America executive who headed up online consumer financial services, recruited the bank's former vice president of government relations, Cheryl Sorokin, who is now Encirq's chief privacy officer. She has already tapped her contacts on Capitol Hill to present Encirq's business plan.

Encirq's greatest asset on the privacy front is board member Christine A. Varney, a former Federal Trade Commission member.

Ms. Varney has played an influential role in the privacy debate. As an FTC commissioner, she urged companies to develop consumer-friendly privacy policies as a way to avoid government regulation. Now, as a lawyer in private practice at Hogan & Hartson in Washington, she heads an industry consortium, Internet Practice Group.

Encirq probably will need Ms. Varney's endorsement. Its business model bears some similarity to that of DoubleClick, the Internet ad agency that drew fire for its method of tracking consumers' online buying behavior. Some analysts say DoubleClick has tainted the market for Encirq.

"There has been so much concern over personalization," said Kim Lenta, an analyst with Current Analysis in Sterling, Va. "I don't think the vast majority of consumers will understand Encirq."

Nevertheless, Ms. Lenta said more direct marketers should emulate Encirq. "They are setting the standard out there for others to follow," she said.

Encirq appears to be borrowing a little from several marketing programs. Supermarkets give out loyalty cards that track consumers' purchases and trigger coupons from manufacturers. American Express Co.'s Custom Rewards allows merchants to send messages to Amex cardholders in their billing statements.

One main difference between these programs and Encirq's is that Encirq will not see the customer profile it generates, nor share it with partners. The data warehouse, as Mr. Vogel calls it, will stay put on the consumer's hard drive.

"Your own bank can't tell you what advertising is on your statement," Mr. Vogel said.

Evan Hendricks, editor of the Washington, D.C.-based newsletter Privacy Times, said: "It looks like they are trying hard and that they have the right idea."

The information in an Encirq profile becomes more sophisticated over time, as a consumer activates his or her statement by clicking on the links it contains.

Encirq has signed up 100 Web merchants, and it is planning a pilot with Bank of Hawaii. Mr. Vogel said his company has signed a letter of agreement with JCB, the Japanese credit card company, to introduce the system in Japan next year. Total System Services Inc., the credit card processor, has agreed to integrate the Encirq technology into its Internet platform.

Eventually, Mr. Vogel said, Encirq plans to seek partnerships with all kinds of companies that do online billing. For now, he said, Encirq can "put banks' data to work in a way they are unable to do themselves."

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