Privacy: A Modern Challenge
By Stacey Winkler for the Consumer's Council
August 17, 2001
In the present and highly commercial consumer age of easy access, privacy has become a precious commodity. The price of convenience, of having untold volumes of information available with the click of a mouse, can be high when one's private data becomes as easily available as everything else.
Privacy notices sent out by corporations have flooded mailboxes of late, but they are merely indicative of a growing trend that will further deprive consumers of an assumed right to privacy. As of July 1, 2001, a federal law took effect that required financial institutions to inform their customers of exactly how their personal information would be used. These institutions would also be giving consumers the opportunity to "opt-out" of having their personal information shared with third-party, non-affiliated companies. Although the privacy notices mailed out in anticipation of the July 1 deadline advised consumers of their rights in a broad stroke, they have consistently been mistaken or disregarded by their recipients as junk mail and subsequently disposed of.
The Cambridge Consumer's Council believes it is imperative that consumers be aware of their privacy rights. A consumer has many options available to him or her to protect or impinge upon the distribution of personal information. By contacting the institution in question and making it aware of the desire to not have one's private information shared with other companies, a consumer may exercise his/her right to privacy at any time.
The option to request the non-disclosure of such information seems an obvious right, but the opt-out notices delivered to consumers in bulk over the course of the last few months did not make the availability of such a right easily understandable. The simple message about which consumers should be aware, is that companies are allowed to disclose one's private information to other companies unless specifically told not to by the consumer. This straightforward message, however, was couched, in most instances, by such convoluted and complex technical language, that even individuals with years of legal training had difficulty wading through the material to gather the precise implications. Additionally, many such 'opt-out' notices were printed in 8 point type which is significantly more difficult to read.
As a result of the poorly-designed and worded 'opt-out' notices, less than one half of one percent of all consumers responded, to fully exercise their rights as stipulated. Sixty-three percent of consumers did not read the privacy notices at all.
According to the 1999 Gramm-Leach-Billey Act, notices informing consumers of their privacy rights must be "clear and conspicuous". The Federal Trade Commission further requires that notices must "call attention to the nature and significance of the information contained." A petition filed by a coalition of consumer groups with the Federal Trade Commission pointedly discusses the coalition's concerns with the current opt-out notices. A complete presentation of the Coalition's concerns as expressed in the petition and a further discussion of consumer's rights can be seen at
www.privacyrightsnow.com .Privacy Notices, and what they should mean for you
A privacy notice distributed by one's financial institution must describe the business's policies for collecting, protecting, and sharing personal information, including:
A privacy notice must also contain a description of how one can take action to keep nonpublic personal information from being publicly disclosed. An "opt-out" right specifically is the right to take action to keep one's information private. Such a right gives consumers the opportunity to take action to exclude personal information from future disclosures.
A privacy notice should describe two separate and different opt-out rights that allow the consumer to take action in regards to restricting how the business in question may disclose:
A "related" or "affiliated" business is one that shares a common ownership with the financial institution. The institution may state in its privacy notice that it will never disclose any type of nonpublic personal information to any type of related or unrelated businesses except as permitted by law. If the institution already restricts disclosure of personal information, then it does not need to describe any "opt-out" rights.
What information does your opt-out right protect?
Nonpublic personal information protected under this right is any information about you that is not available to the general public. Such nonpublic personal information includes:
Exceptions:
These opt-out rights do not apply to the disclosure of information allowed by law, or to the disclosure of information necessary to process your application, or to provide a financial product or service.
Some credit information is protected:
The consumer has the right under the Fair Credit Report Act (FCRA) to keep a financial institution from disclosing certain types of credit information to related businesses. This "opt-out" right is limited credit-report information. The financial institution will be able to disclose other nonpublic personal information about you to its related businesses even if you opt-out of having your credit information disclosed.
Your privacy notice must explain how you can "opt-out" to keep your personal credit information from being disclosed to a related business. Credit information includes information about a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, mode of living, but does not include information about your transactions with your financial institution or other types of nonpublic personal information.
How can I exercise my right to opt-out?
The privacy notice a consumer receives should explain how to opt-out. Among the reasonable means included by financial institutions in their privacy notices:
Once the appropriate and specific procedures have been followed, the choice to opt-out on one account will apply to all accounts the consumer has with the entire entity of the financial institution.
Elections to opt-out will continue to protect a consumer's personal information for as long as the customer relationship with the institution is maintained. Even though consumers receive annual privacy notices, the consumer does not need to opt-out more than once. The choice to opt-out will only end when the consumer informs the financial institution that it may disclose private information to others.
Please visit www.privacyrightsnow.com to download an opt out letter.
Other avenues of consumer privacy protection
The best way for a consumer to protect his/her privacy is to be one's own best advocate. There are a number of resources available to consumers so that they may best serve their own interests. Personal information crops up in any number of ways and a cautious consumer would do well to avail him or herself of the following services:
Credit reports:
The information contained in a credit report can be a determining factor in awarding loans, renting an apartment, obtaining a job or receiving insurance coverage. It is therefore important to order a credit report once a year to ascertain that the information contained therein is accurate. To request a credit report contact one of the following firms:
|
Firm |
Phone number |
Web address |
|
Experian |
1-888-397-3742 |
|
|
Equifax |
1-800-685-1111 |
|
|
Trans Union |
1-800-888-4213 or 1-800-916-8800 |
Medical history:
To find out if information about medical history is stored in the insurance industry database, contact the Medical Information Bureau (MIB). A copy of an individual's MIB report may be obtained by writing the Medical Information Bureau, P.O. Box 105, Essex Station, Boston, MA 02112. Or by calling at 617-426-3660.
The MIB website address is
www.mib.com.Social Security:
A copy of a Social Security Earnings and Benefits Statement can be obtained by calling 1-800-772-1213. The website address is
www.ssa.gov.Stopping unwanted solicitation:
By participating in the Direct Marketing Association's Mail Preference Service you are added to a list of people who do not wish to receive junk mail from many of the major, national catalog and marketing companies. That address is Mail Preference Service, P.O. Box 9008, Farmingdale, NY 11735-9008
To reduce calls from telemarketers, send name, address and phone number to the Direct Marketing Association's Telephone Preference Service, P.O. Box 9014, Farmingdale, NY 11735-9014
It is important to note here that whenever an individual provides his/her name, address, phone number and other personal information, his/her name could potentially end up on mailing lists. Keep this in mind when taking part in these kinds of activities:
To have your name removed from mailing lists that provide offers of pre-approved credit, contact the credit bureaus at 1-888-5OPTOUT or 1-888-567-8688.
Ultimately the responsibility for protecting consumer privacy rights lies with the consumer. With so many opportunities to infringe upon privacy through the steady stream of information so readily available today, it is difficult to countermand them all. But an aware and responsible consumer should be able to staunch the flow.