In 1999, Congress passed a law that permits banks, insurance companies, brokerage houses and other financial institutions to share information with each other unless their customers "opt-out." Under this law, informally known as "Gramm-Leach-Bliley," you must contact every financial institution you do business with and specifically tell them you do not want them to sell, trade, share, or give out your nonpublic private financial information.
Remember the avalanche of "privacy notices" you received last summer? Even though they look like junk mail, you should carefully read each one. The "opt-out" information is buried in the fine print. To exercise your opt-out rights, most banks require you to identify your account number, provide information of who you are, address your own letter, and pay postage. The average household has customer relationships with 18 financial institutions. To protect your private financial information, you must opt-out of every single one.
Here's the kind of information your bank can sell to anyone:
- I earn $42,535 per year.
- I make semi-monthly paycheck deposits of $1,276.05.
- My spouse is paid more frequently and makes weekly deposits of $521.
- Our average bank balance is $1,861.82.
- We have an average credit card debt of $654.
- We write more checks to Joe's Bar than anywhere else.
- Our automatic withdrawals include $150 per month to XYZ Mutual Fund.
- We make a car payment of $225 per month for a used 1999 Buick.
- We give $29 per week to such and such Church.
- I had to write a check for a $70 speeding ticket in Pennsylvania.
If you don't opt-out, your financial institutions can sell, share, trade or give this information to anyone for any reason unless you contact them and tell them they can't. If you forget or don't do so in a timely manner, you're out of luck and your confidential information is no longer confidential.
Fortunately, Gramm-Leach-Bliley permits individual states to reject the opt-out standard. Voters in North Dakota, with help from the ACLU, just voted 72% in favor of opt-in. States have been more successful in passing privacy legislation in recent years, as anti-privacy lobbyists have paralyzed federal legislators.
The ACLU-NJ will campaign this year for a new opt-in privacy statute in New Jersey. In the meantime, here is a sample opt-out letter you send to your financial institutions:
Financial Services Institution
City, State ZIP
Re: Opt-Out Instructions
Account no. ______________
Dear Account Representative:
This is an "opt-out" request, instructing you and Financial Services Institution to remove my name from your shared marketing lists. Please do not disclose information about me to any other companies.
Kindly let it be known at Financial Services Institution that even though federal law permits financial institutions to share information about me with their "affiliates," I consider it an invasion of privacy. Likewise, I consider the practice of disclosing my personal information to third parties an outrage. Please provide me with an accounting of the disclosures Financial Services Institution has made about me in the last year, and see to it that no further disclosures are made without my affirmative consent.
I urge Financial Services Institution to view privacy protection not as a restriction on commerce, but as good business, supporting innovation, confidentiality and trust.
Very truly yours,
-By Grayson Barber, Esq. an ACLU-NJ Cooperating Attorney