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With the increased need for fast and yet cheaper ways of communication, companies are now increasingly adopting Internet related technologies such as Electronic Commerce (E-Commerce) and Internet banking. Although these technologies have improved customer services, they have also brought in privacy and security issues concerning customer protection over the internet.  This is more so in the banking sector which deals specifically with customers’ private information. Although there have been various studies on online security and privacy regulations, few have concentrated on the privacy policy statements of South African banks and their compliance to the rules of the Electronic Communications and Transactions Act (ECT Act) and the impact that these rules and the compliance to the ECT Act, have on the customer’s level of business confidence in a bank.

This empirical report is an attempt to examine this phenomenon. The research adopts a quantitative and qualitative approach. We specifically investigated their privacy policy statements with an aim of finding the effect of compliance on customer perceptions and level of business confidence with the bank. The results showed that South African banks do not comply with all the provisions of the ECT Act and there were inconsistencies across banks in terms of the presence, accessibility and readability of the privacy policy statements. The content analysis was followed up by interviews which revealed a sense of “mistrust” and “lack of business confidence” among customers. The interviews further revealed that the inconsistency in the characteristics of the privacy policy statements and their non- compliance to the ECT Act had a negative impact on the customer’s trust and level of business confidence in the bank.