For Immediate Release: 21 June 2001
Contact: Remar Sutton 404-229-5094
Jake Lewis (Ralph Nader’s office) 202-387-8030
Ed Mierzwinski, USPIRG, 202-546-9707
Marc Rotenberg (EPIC) 202-483-1140
Travis Plunkett, CFA 202-386-6121
David Vladeck, Public Citizen, 202-588-1000
Beth Givens, Privacy Rights Clearinghouse 619-298-3396
--New Opt-Out Website And Formal Petition To Regulators Announced –
-- Groups Urge Stronger Privacy Laws To Replace Weak, Confusing Notices--
WASHINGTON, DC -- As a July 1 privacy notice deadline looms, the nation’s leading consumer and privacy advocates today exposed the strategy of the nation’s banks and other financial institutions to send consumers billions of “deceptive” privacy notices required by a “defective” new financial privacy law, while the banks’ lobbyists oppose stronger privacy laws in state capitols and Congress.
The groups launched a website, “privacyrightsnow.com,” to teach consumers how to “Say No” to banks selling their confidential records to telemarketers and also urged consumers to “fight back” by demanding stronger privacy laws based on consent, because “Notice is not enough.” The groups also announced a planned petition to regulators to improve compliance with the law.
“In Congress, there is strong bi-partisan support for real opt-in privacy protection, said Ralph Nader. “Strong privacy protection would pass if the leadership of both Houses would let a clean bill come to the floor for a straight up or down vote in this Congress.”
“Banks have made “saying no” confusing and cumbersome,” said consumer advocate Remar Sutton. “Our coalition’s new website “privacyrightsnow.com” shows consumers how to say no or “opt-out” easily and our sample opt-out letter puts the burden on companies to follow their customers' privacy requests, rather than leaving the burden on consumers to understand and follow the companies’ deliberately confusing messages.”
"It is time for Congress to act to safeguard the privacy rights of American consumers. Too many companies have too much data about our private lives," said Marc Rotenberg, executive director of the Electonic Privacy Information Center.
“The notices are unintelligible and purposely deceptive,” said Ed Mierzwinski of U.S. PIRG, “But the law itself is defective, since it gives banks rights to sell information as long as they give consumers notice, but notice is not enough. That’s not surprising, however, since the bank lobbyists are everywhere in Congress and every state Capitol trying to dumb-down efforts to pass real privacy protections.”
The 1999 Gramm-Leach-Bliley Financial Services Modernization Act requires any bank or other financial institution that shares or sells confidential consumer account information with either affiliates or third parties to send consumers a notice of their sharing and selling practices by July 1, or lose the right to continue to share and sell. The law gives customers a limited right to say no (opt-out) to sharing or selling with some, but not all, third parties. Even if a consumer says no, banks can still share health and financial information with affiliates and most third parties. The new federal law allows states to pass stronger financial privacy laws. For example, a financial privacy opt-in proposal (SB 773, Speier) has passed the California Senate, but faces an uphill battle in the Assembly.
"Congress must give consumers real privacy protection," said David Vladeck, Director of Public Citizen Litigation Group. "Until then, the federal regulatory agencies must implement the law in a way that gives consumers an opportunity to prevent financial institutions from selling their private personal information to the highest bidder, so our attorneys are drafting a formal petition to compel the regulators to use existing authority to strengthen the rules."
“Studies by our readability consultant of 34 different privacy notices found they required an average of between 3 and 4 years of college education to understand,” said Beth Givens, Director of the Privacy Rights Clearinghouse. “If these privacy notices were insurance policies, all of them would have failed readability requirements in every state that requires plain English for insurance policies.”
The groups support stronger laws based on Fair Information Practices (e.g., limited information collection, right to review and correct records, consent (opt-in) before sale or secondary use) and intend to work with the bi-partisan Congressional Privacy Caucus chaired by Reps. Markey (D-MA) and Barton (R-TX) and Sens. Shelby (R-AL) and Dodd (D-CT) to pass strong privacy laws that protect consumers in financial and all circumstances.
“Unfortunately, financial services companies are the big winners under this new law and consumers are losers,” said Travis Plunkett, Consumer Federation of America legislative director. “Consumers lose the right to real choice. They lose control of highly sensitive information. And they could lose their savings, when scam artists exploit access to this information to deceive and defraud them.”
“Until Congress enacts the strong privacy laws consumers are demanding, the epidemic of identity theft, financial rip-offs and other problems caused by unfettered corporate access to the bits and pieces of our personal lives will only get worse,” concluded Nader.
The groups urged consumers to do two things: First, opt-out by visiting privacyrightsnow.com and second, fight back by urging Congress and state legislatures to pass real opt-in privacy laws.
Remar Sutton, organizer of this press conference, is President and co-founder with Ralph Nader of the Consumer Task Force For Automotive Issues, and coordinator of the new www.privacyrightsnow.com opt-out website.
The Consumer Federation of America (www.consumerfed.org) is a coalition of 285 national, state and local organizations with a combined membership of over 50 million people.
The Electronic Privacy Information Center (EPIC) (www.epic.org) is a public interest research center in Washington, D.C. It was established in 1994 to focus public attention on emerging civil liberties issues and to protect privacy, the First Amendment, and constitutional values. EPIC also maintains the central website www.privacy.org for news and action and coordinates the activities of the Privacy Coalition (www.privacypledge.org), an organization of privacy, consumer, family, conservative and civil liberties groups working together for strong privacy laws.
Public Citizen Litigation Group is part of Public Citizen, (www.citizen.org) the citizen advocacy organization founded by Ralph Nader in 1971.
The Privacy Rights Clearinghouse (www.privacyrights.org) is a nonprofit consumer education, research, and advocacy program. Its publications empower consumers to take action to control their personal information by providing practical tips on privacy protection.
U.S. PIRG (www.pirg.org/consumer) is the national association of state Public Interest Research Groups. PIRGs are non-profit, non-partisan consumer, good government and environmental advocacy organizations.