Group upset over bank privacy
| • | The grades for 15 leading banks |
By Carl Weiser
Gannett News Service
WASHINGTON — The nation's biggest credit card-issuing banks are sending their customers confusing and misleading notices about their privacy rights, a national consumer group charged yesterday.
A 1999 federal law requires banks to tell customers how their data are shared and how to opt out of such arrangements. Banks began sending the required privacy notices in April and May.
But the notices sent from the 15 banks issuing the most credit cards show that the notices are filled with unintelligible legalese, small print and "purposeful misinformation," said Jeff Blum, executive director of USAction, which issued the report.
"Consumers, beware," USAction President William McNary said. "When a bank says, 'Your privacy is important to us,' hold on to your wallets."
The American Bankers Association said in most cases the language in the notices was taken directly from federal regulators' suggestions. The banks are only trying to comply with the law, spokeswoman Catherine Pulley said.
"We're going to work with regulators and our customers to create notices that are a little bit more understandable," she said.
The Federal Trade Commission has a session for banks and regulators today on how to improve the financial privacy notices.
In its report, "Your Privacy Is Important to Us?," USAction said the following:
- The nation's largest issuer of credit cards, MBNA America, got the worst overall grade, an F.
- All but two of the banks tried to "sugarcoat" the privacy notices, discouraging consumers from calling in or filling out a form to keep their information private.
The danger is that not only will telemarketers or other salespeople acquire consumers' information, but also if more entities have their data, the chance for misuse is greater, report author E. Joyce Gould said. The more computers the data are stored on, the greater the chance of someone hacking in and stealing information. Also with widespread dissemination of information, the greater the chance that personal data — such as prescription drug purchases or bad credit — will fall into the wrong hands.
