When Banks Offer Privacy, Restrictions and Limitations Apply

by Robert Downes

Well you might want to dig those letters out of the recycling because the buried message is a plan to share your personal, private information with anyone who'll stand to benefit from spreading it to the four winds.

Over the past few months, everyone in this country who has a credit card or a bank account has been receiving some version of this preposterous "we value your privacy" letter -- a wolf in sheep's clothing which serves notice that your personal information will be shared with other companies, thanks to new federal laws which favor banks.

Banks value your privacy so much that they're planning to share it with retailers, insurance agents, direct marketers, membership clubs, publishers, mortgage companies, non-profit organizations and anyone else they can think of. The Gramm-Leach-Bliley Act of 1999 was intended to deregulate financial institutions, making it possible for banks to sell insurance and for insurance companies to get involved in savings and investment schemes.

Congress included some privacy protections after it became clear that financial organizations planned to run amok sharing information on their customers.

Unfortunately, the Act put the impetus of protecting privacy on each individual citizen of the United States and not on the banks and insurance companies. We have to respond to them to protect our privacy and not the other way around.

That means that if you have some connection to 5, 10, 20 financial organizations, you have to respond to each one of them, noting that you don't want them sharing the contents of your proverbial underwear drawer.

By this July, every financial institution in the country is required to complete the process of informing their customers in a "clear and conspicuous" manner on the company's privacy policies and practices.

Once the bank, insurance company or credit card entity has done its duty, it may share "nonpublic personal information" with other parties unless you contact them to opt out.

"Clear and conspicious" clearly means something different to a financial institution than it does the average person. Perhaps if you have a magnifying glass and care to spend an hour browsing the legalese of your junk mail, these notices are "clear and conspicious."

Right.

If you care to read through the teensy type boilerplate of these notices, you discover that you can forbid your financial institution to share information about you. But needless to say, it's a hassle and it involves writing or calling the company. And many companies have thoughtfully not included a return envelope or postage. You're far more likely to chuck the letter as part of the endless stream of bank and credit card junk mail that arrives in your mailbox daily.

Banks feigning concern over privacy is a way of sugarcoating the real intent of violating our privacy to the nth degree. It's like a rapist pretending to be the Good Samaritan.

What exactly is "nonpublic personal information?" Information about your credit history, income, marital status, employment history, general snooping -- the works. Do you want that information circulating to every bank, credit card company, retailer, telemarketer and insurance corporation in the world?

Well, if not my friends, be sure to look for those "clear and conspicious" notices in your mailbox and send them in, or be prepared to open a Pandora's Box of junk mail, telemarketing calls, email spam and your personal information rocketing around every place imaginable, courtesy of Congress and your friends in the financial world. They're the "friends" who value your privacy... especially since they stand to make money off trading it.