Now is not the time to toss junk mail and ignore inserts in your bank and credit card statements. "Watch your mail!" says Tena Friery, research director of the Privacy Rights Clearinghouse.
Because of a new federal law, financial institutions are now mailing notices to consumers containing important information about their privacy rights. "Failure to pay attention to these privacy notices may result in sensitive financial data being sold to other companies for marketing and other purposes," warns Friery.
The Financial Services Modernization Act (also known as Gramm-Leach-Bliley) requires financial institutions to tell consumers how they collect and use their customer data. The law also gives consumers the right to opt-out -- that is, tell their banks, credit card companies, brokerage firms, and insurance companies that they cannot sell, lease, or otherwise disclose information to outside companies.
The Privacy Rights Clearinghouse has developed two guides to help consumers make sense of this new law, available on its web site as well as in paper form:
- "Protecting Financial Privacy in the New Millennium: The Burden Is on You." (Fact Sheet 24), www.privacyrights.org/fs/fs24-finpriv.htm
- "How to Read Your 'Opt-Out' Notice." (Fact Sheet 24a),
"The new law is complex, says Friery. "And the privacy notices are not easy to understand. Our goal is to translate the 'fine print' for consumers," she adds. "The notices may actually be telling consumers 'we can sell information about your income, debt level, payment history, bankruptcies, hospitalizations and much more unless you tell us we can't.'" Consumers must receive all such privacy notices by July 1, 2001. Friery warns that the notices are easily confused with the deluge of advertisements customers receive along with every account statement. To add confusion, the privacy notices also include important legal rights to protect information under another federal law, the Fair Credit Reporting Act (FCRA). The FCRA says consumers are entitled to opt-out to prevent sharing of information about their "creditworthiness" among affiliated companies.
The Privacy Rights Clearinghouse is a nonprofit consumer advocacy program based in San Diego. Its financial privacy consumer education program is funded by the Deer Creek Foundation of St. Louis, Missouri.