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The identify theft protection company, LifeLock, took a risk with its marketing campaign: CEO Todd Davis happily revealed his social security number in a number of print ads and on the company website. The angle was that Davis was so confident about his company’s abilities that he could broadcast his personal information without negative repercussions. Well…

Unfortunately, LifeLock has been hit with a class action suit coming from three different states. Angry customers claim that LifeLock is guilty of false advertising and fraudulent business practices. It turns out that in 2007, a man in Texas received $500 from a payday lender using Davis’ social security number. This was the only successful incident among 87 attempts to steal Davis’ identity.

The reasoning goes like this: if the CEO of the company can’t even keep his identity safe, what about us, the poor dupes who actually paid for the service? Hence the lawsuit.

The LifeLock situation only exemplifies the concerns online customers have when they disclose their personal information on the web. Their fears are not totally unfounded, either. According to Privacy Rights Clearinghouse, there were 8.4 million identity thefts in the U.S. in 2007. On the bright side, the number of ID thefts have been steadily decreasing since 2003.

So, as an online vendor or manufacturer, how do you set up an e-commerce site that customers can trust?

First, establish transparency. Provide contact information and mention a physical address, if applicable, to let your customers know that you are not some fly-by-night operation. Also, an About Us page is de rigueur content on any business site. For an extra personal touch, show pictures of high-ranking employees such as the CEO, President, or Founder.

Second, mention the technical aspect of your site’s security encryption. This information should be available front and center whenever a customer is checking out a shopping cart or basket. Is the site certified? Show the certificate! Also, at this point in accommodating the customer, you should also make available your policies on refunds and privacy. All of this information is expected during a responsible e-commerce exchange.

Lastly, feel free to mention any other kinds of certification or other forms of formal approval. If you are a member of the Better Business Bureau or a trade association, you can further establish your legitimacy with seals and logos.

You may find that not many customers actually read through your policies or data encryption explanations. But do expect them to gather an impression of your site’s trustworthiness based on whether you opted for these indications of transparency.