How Private Is Your Financial Data?

Our bank, BankDirect, is mailing customers a 'Notice of your Financial Privacy Rights', containing the following text: 'We may disclose information about you to our affiliates. Here are the kinds of information and the source of that information: Information about your transactions and experience with us, such as: Name, address, account balances, account activity, types of accounts, transaction history, and payment history. Federal law allows us to disclose the information listed above with our affiliates. You do not have the right to opt out of the disclosure of this information...We may disclose information about you to our affiliates: 1) to provide you with information about additional products and services; and 2) to better serve you, to help us save you time and money, and to help you understand your specific needs.' Am I the only one who is bothered that my bank is ready to share my transaction history, including my salary (direct deposit) and payments to merchants (online bill pay)? More importantly, are there any banks that don't share (or sell) their customers' private information? I couldn't help but notice that BankDirect's web site has a different privacy policy, which reassuringly states 'We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you.' Hmmm..."

Comments

Affiliates only

[Lionel Hutts]

See that word "affiliate" in there? That means, basically, other divisions of the same corporate family. If they have a broker-dealer unit, for example, that's not technically part of the bank, so its ads are sent to you by an "affiliate." It's pointless to try to regulate information sharing within a single business, and don't believe anyone who says they will.

Nothing to see here, move along.

Re:Affiliates only

[Col. Klink (retired)]

Affiliates do NOT have to be the same corporation. Affiliates are simply companies with which one business has a formal agreement with another.

For example, Amazon has an "affiliate" program that allows website operators to get referral fees. All you need to do is fill out a form (and have a website). Amazon Affiliates are NOT part of the Amazon corporate structure.

This was the major loophole in the Privacy Act that makes it meaningless. They are free to share any data they like with companies with which they have a business relationship with. But the "business relationship" was left undefined. If a agree to buy the names of all your customers, we would have a business relationship and the opt-out rules would not apply.

Some states have additional limitations (which is why Verizon is suing the State of Washington, for example).

Re:Affiliates only

[Lionel Hutts]

Absolutely not.

This requirement has nothing to do with the Privacy Act (and neither does the Verizon case, for that matter, though that's a different law too). This is from Regulation E of the Federal Reserve, which defines "affiliate" for banks in roughly the way the U.S. securities laws do: as a company controlled by, controlling, or under common control with another. The fact that Amazon uses the word in another sense is totally irrelevant.

Once again, everyone, do your homework.

Credit Unions

[BigChigger]

while not a cure-all, seem a bit better on this front than a regular bank.

Ditch your bank. Join a CU.

BC

a few thoughts

[steve.m]

Here in the UK, rival banks make it very easy to switch - all you do is sign once and they move all your direct debits, etc. for you (I get frequent offers but I'm happy with my bank right now, so I don't know how well that works)

If you can't find a privacy friendly bank, or it's insanely hard to get all your banking services transfered, you could always randomize your spending habbits:

1. Withdraw all your cash and pay for everything through the whole month in cash

2. Withdraw all your cash and then pay it back in 2 days later. repeat.

3. Pay for everything on a credit card, then clear it at the end of the month.

4. Make frequent small withdrawls instead of weekly large withdrawls

at least then, you'll be partly masking what you're upto and providing less valuable information to their 'partners'....

Maybe not as bad as it sounds...

[Mr_Person]

First of all, "affiliates" probably means companies with which the bank has a close relationship. For instance, many banks have outside companies do their data processing or do their online banking or bill pay services for them. There's really no way they could do these services without sharing your info.

As for banks that don't share your information, have you considered trying a credit union? Unlike banks whose main concern is making money for the shareholders, a credit union's main concern is providing the best service to their members because it is run by the members for the members.

They all do it.

[FreeLinux]

As it states federal law says that they are allowed to do this. More worrisome is the list of "affiliates", which is usually included in these disclaimers. Most of the policies pose "affiliates" in such a way as to suggest that they are only internal departments and subsidiary companies. But, the fact is that affiliates also include marketing organizations and a lot more.

In a few cases the banks actually have a subsidiary marketing company whose product is marketing lists. In these cases the information is shared with the "affiliates" for "legitimate business purposes" but, the "affiliates" then turn around and resell your information to anyone with the cash.

Recently, I was contacted by a mortgage telemarketer, which I have never done business with. they had ALL of my data including transaction history. When I told them I wasn't interested and that their information was inaccurate they actually had the gall to ask me to correct the inaccurate data. The schmuck says, "We pay a lot of money to get this information and if we aren't getting the right information we need to know about it and you need to help us fix it.". Naturally, I advised him to get bent but it is still infuriating that ANYONE can get this information.

The problem goes further too. It's not just marketing companies that are working against us. The government is as well. No, I'm not a conspiracy theorist.

Few people realize that numerous government agencies provide personal information including your Social Security number to companies "with a legitimate business need for that information". They list examples of companies with legitimate business needs and the first example on the list is marketing companies.

Of course it sucks! But, the genie is out of the bottle.

Whoa there cowboy!!!

[Picass0]

"'We may disclose information about you to our affiliates..."

Typically a financial institution considers an affiliate to be another (smaller) bank owned by the same corporate parent. An affiliate may also be another company in the corporate structure. It does not necesarilly mean a 3rd party or independant company with a working relationship to the first company.

That said, I still consider my financial (or any personal info of mine) to be mine, and I want the right to know when this information is being traded or sold, and the right to opt out.

Regulation P

[Lionel Hutts]

I humbly apologize to the community: I meant Regulation P, of course, not Reg E. The definition of affitiate I gave was, however, correct: it requires at least enough common ownership to constitute control. Amazon's "affiliates" are not Reg P affiliates.