Copyright 1999 The Baltimore Sun Company
THE
BALTIMORE SUN
August 9, 1999, Monday ,FINAL
SECTION: BUSINESS ,5C Staying Ahead
LENGTH: 833 words
HEADLINE: At
least ask your banker not to sell data about you
BYLINE: JANE BRYANT QUINN
BODY:
YOU PROBABLY think that your bank keeps mum
about your financial affairs. Think again. It may be selling you down the river,
in order to earn some extra money.
Many banks sell your confidential
account information to telemarketing firms. Salespeople then call you, flogging
discount dental plans, travel clubs and other products. Monthly payments are
deducted automatically from your bank account or charged to your credit card.
The bank earns commissions on the sales.
Comptroller of the Currency
John D. Hawke Jr. calls some of these practices "seamy, if not downright unfair
and deceptive." You can try to get off the sales list (see below), but might not
be able to.
When the telephone salespeople call you, what might they
know? Plenty. Besides disclosing your name, age, address and phone number, the
bank might have divulged your bank account number, Social Security number,
checking account balance, credit limit, credit score (showing how creditworthy
you are), the number and type of credit cards you carry and what you owe on
them.
A case recently brought by Minnesota Attorney General Mike Hatch
against Minneapolis-based U.S. Bancorp charged that some customers had their
bank accounts and credit cards debited, even though they didn't want the
service.
U.S. Bancorp, which has 1,023 affiliated banks and branches,
settled the case with no admission of wrongdoing. But it agreed to fines,
restitution and charitable contributions of about $3 million --
the approximate amount it had earned on sales commissions.
Theoretically, the Fair Credit Reporting Act (FCRA) limits the way some
of your financial records can be used.
FCRA covers credit information,
for example, your income, assets and employment history. Under the law, banks
have to tell you that they might disclose this information, and give you a
chance to take your name off the telemarketing lists. This is called "opting
out."
Unfortunately, there's no effective way of enforcing FCRA, says
Hawke, whose office regulates 2,400 national banks. The regulators don't know
what the banks are doing, and few customers know they can opt out.
What's more, no federal law protects what's called "transaction and
experience" information -- namely, the details of your bank and credit-card
accounts. They can be disclosed to telemarketers at will, says Amy Friend,
assistant chief counsel at the Office of the Comptroller of the Currency. So can
your Social Security number. U.S. Bancorp had a deal with a telemarketer called
MemberWorks in Stamford, Conn., which, says Hatch, has worked with 17 of the 25
largest banks. Hatch has sued MemberWorks, charging deceptive practices. The
company denies the charge.
As part of its settlement, U.S. Bancorp
agreed to stop working with outside telemarketers selling nonfinancial products.
Wells Fargo and Bank of America announced that they would do the same.
But they can still disclose your confidential account information to
telemarketers selling financial products -- insurance and securities, for
example.
Chase Manhattan says it's revising its telemarketing policy.
Bank One says it gives telemarketers only name, address and phone number.
A financial- restructuring bill in Congress would give you opt-out
rights when banks sell your account information to third-party marketers who are
peddling nonfinancial products, such as dental plans.
But industry
lobbyists and the congressional leadership defeated attempts to give you even
better protection. You'll still have no privacy rights, if your bank wants to
give your confidential information to affiliated telemarketers or peddlers of
financial products. If you don't want your account information disclosed to
telemarketers, here's what to try:
Call your bank and get the name of
the person in charge of customer relations. Write a letter, saying that you want
to exercise your legal right, under FCRA, to keep your credit information from
being disclosed.
Also say that you don't want your bank and credit- card
account data disclosed to anyone selling financial or nonfinancial products,
including the bank's own affiliates. Some banks might agree, although they don't
have to. Ask the bank to acknowledge your letter.
Write to the president
of the bank, saying that you're shocked to learn that your bank and credit-card
account information can be disclosed. The more top officials hear this, the
better. Ask specifically whether the bank shares your account information with
affiliated or nonaffiliated companies.
A mere privacy statement isn't
enough. U.S. Bancorp's privacy statement read, "all
personal information you supply to us will be considered
confidential," but it sold your data just the same.
Tell your senator
and representative that you want an enforceable opt-out right for all
telemarketers, including those affiliated with financial institutions. Unless
Congress hears from the public, the industry's dollars will rule.
Washington Post Writers Group
LOAD-DATE: August 11, 1999
