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How Private Is Your Financial Data?

Posted by Cliff on from the does-your-bank-have-loose-lips dept.

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..."

5 of 64 comments (clear)

  1. Affiliates only by Lionel+Hutts · · Score: 5, Informative

    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.

    --
    I Can't Believe It's A Law Firm, LLP does not necessarily endorse the contents of this message.
    1. Re:Affiliates only by Col.+Klink+(retired) · · Score: 5, Informative

      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).

      --

      -- Don't Tase me, bro!

    2. Re:Affiliates only by Lionel+Hutts · · Score: 5, Informative

      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.

      --
      I Can't Believe It's A Law Firm, LLP does not necessarily endorse the contents of this message.
  2. Credit Unions by BigChigger · · Score: 5, Informative

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

    Ditch your bank. Join a CU.

    BC

  3. a few thoughts by steve.m · · Score: 5, Interesting

    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'....