Jewish World Review May 2, 2001 / 9 Iyar, 5761
http://www.jewishworldreview.com -- WAIT - don't toss all that junk mail before looking at it, especially those annoying inserts tucked into your monthly bills.
Your bank, broker, insurance carrier and mortgage and car loan companies are sending alerts that you should read. They're telling you they will sell information about your private finances to telemarketers and other outsiders unless you file a formal objection.
Five hundred million privacy notices will be mailed by July 1 to notify you that the federal Financial Modernization Act of 1999, designed to promote one-stop financial shopping, also allows you to opt out of having personal data sold or shared with outsiders.
That's 15 pieces of mail or more a household.
Typically, you get up to 30 days to call a 1-800 toll-free telephone number, send a mail-back response or write a letter asking to keep private the information on your account, including your name, address, telephone number, credit data and buying habits.
Congress gave banks, brokerage houses and others permission to share information about you with their affiliates and subsidiaries. So when you send back objections to sharing information, it will apply only to sharing with outside businesses.
Consumer groups say the privacy notices going out now are tough to spot. Consumers Union offers this advice:
- Examine mailings from companies you might not think of as "financial," including travel agencies or retailers with which you have an account.
- Know that online firms must provide notice, too, by e-mail or "snail mail." So make sure it's unwanted spam and not a privacy notice before you hit the "Delete" key.
Also lost in the fine print is the fact that many privacy notices are written for people with college-level reading skills; 85 percent of Americans have a high school diploma at most.
Reading consultant Mark Hochhauser of Golden Valley, Minn., tested 17 privacy notices on a widely accepted reading scale and found them "difficult" to "very difficult" to read. Layout designs and type sizes made some illegible.
"If consumers are unable to easily see, read and understand privacy notices, how can they make informed decisions regarding use of their personal information?" he asks.
Some financial services firms have opted not to share customer information with outsiders, according to a new survey of more than 3,900 financial institutions by Bankers Systems of St. Cloud, Minn. It reports that:
- More than 68 percent of banks and savings institutions won't share customer data with outside parties. Institutions with more than $1 billion in assets are most likely to share.
- Sixty-five percent of credit unions plan to share enough information to send members notice of disclosure and opt-out rights.
Banks, thrifts and credit unions see these privacy notices as "a normal part of doing business" and are in good shape to notify customers by July 1, says Bankers System attorney Katie Iverson.
But she predicts that insurers, travel agents and retailers unaccustomed to dealing with federal regulations "will be scrambling" to meet the July deadline because many don't understand the work that privacy policies take.
On the Net: www.fdic.gov
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