Many of us have had the experience. You’ve gone online to buy something and then from that day forward ads for similar products and services start popping up everywhere.

It’s not by accident this happens. Companies have lots of different tools to virtually follow you around when you’re online. It gives them a powerful way to discover what you buy or are interested in online and tailor their advertising to you specifically.

Much of the time such tracking is relatively harmless, often nothing more threatening than an office supply company sending you ads for paper after you purchase a printer, for example.

But what if an insurance company makes note that you have bought a deep fat fryer and, as a result, decides to bump up your premiums? Or say a bank notices you are playing a lot of online poker and decides you are not such a good credit risk?

Or consider that just last year so-called “zombie cookies” were discovered that get reinstalled on a consumer’s machine even after he or she has purposely deleted them

These are not ridiculous hypotheticals.  The technology is already out there and is being increasingly used by companies to better target their advertising. And from a legal standpoint, the rules are so murky that companies could conceivably engage in the above activities and many more.

Consumers Union recognizes that many companies manage consumer information responsibly, and use it to enhance the consumer experience online by quickly connecting individuals to relevant products and services. Arguably, consumers benefit when they receive truthful advertisements and offers tailored to their specific interests.

That said, many consumers are deeply troubled by the extensive collection, sharing, and compilation of data about them. A December 2010 Gallup poll shows, for example, that when individuals were asked whether advertisers should be allowed to match ads to their specific interests based on past web pages visited, 67% answered ‘no.’

We are equally troubled by the issue. It’s become increasingly obvious that voluntary industry self-regulatory initiatives, based primarily on the notice-and-choice system, have proven difficult and unwieldy for consumers, and have done little to restore confidence in the system.

That’s why CU supports a Federal Trade Commission proposal to develop a comprehensive privacy framework that would apply broadly to online and offline consumer data collection practices.

CU believes that any such framework must be grounded in statute and implemented and enforced primarily by the FTC, an independent agency with a focus on protecting consumer rights.

We also agree with the FTC that in order for consumers to have real control over the way their data is used, they must be presented with simpler and more meaningful choices regarding practices that are of greater concern. Within this context, Consumers Union strongly supports the FTC’s concept of a universal “Do Not Track” mechanism that would allow users to persistently opt out of certain online tracking and information sharing.

If you would like to learn more about the issue of online privacy you can read CU’s recent filings with the Federal Trade Commission and the Department of Commerce about online privacy.