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News :: Miscellaneous |
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Banks Flunk Consumer Test for Credit Card Privacy Notices |
Current rating: 0 |
by USAction
(No verified email address) |
04 Dec 2001
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No. 1 Credit Card Bank in Nation Has Worst Privacy Notice |
WASHINGTON - December 3 - MBNA, the number one credit card issuing bank in the nation, received the lowest grade in a new national report on bank privacy notices. The report card issued today by USAction, a national consumer organization, found that bank privacy notices are confusing and misleading and fail to comply with a new federal law.
USAction graded the privacy notices sent out by the 15 banks that issue the most credit cards and found that three received an "F", six got a "D" and no bank got better than a "C". MBNA, with 44 million cards in people's wallets, got the lowest grade of all, a 0.6 out of 4.
"Consumer beware, when a bank says 'Your privacy is important to us' hold on to your wallets," said William McNary, President of USAction. "Bank privacy notices are designed to be confusing and misleading in order to convince consumers not to exercise even the very weak privacy protections available under the law," said McNary. "It's no wonder that consumers shake their heads at the hard-to-read notices and throw them in the trash rather than acting to protect their privacy."
The USAction survey found that:
-- 9 of the 15 banks got a D or F -failing or close to failing to provide legally required information in an understandable way.
-- The highest overall grade was a C - no bank is doing a good job of this.
-- One bank doesn't even make its notice available until after you've given them your personal information, earning that bank an automatic F.
-- Every bank failed in at least one way to make it easy to protect consumer privacy.
-- Every bank failed in at least one way to present the information clearly and understandably, a requirement of the new federal law.
-- 12 of 14 banks failed in some way to make complete information available to consumers.
-- Every bank but two tried to sugarcoat the privacy notices and discourage consumers from acting to protect their privacy.
-- MBNA got the fattest F because its privacy notice was very hard to read, the instructions to consumers on how to protect their privacy was buried in the middle of a paragraph, and the bank gives almost no information about what it does with a consumer's information.
"It's outrageous that MBNA, the company that built its credit-card business on affiliations with non-profit groups, colleges and unions has the worst privacy notice in the entire industry," said Jeff Blum, Executive Director of USAction. "Those non-profits who are encouraging their members to join MBNA should demand that MBNA write a clear, honest privacy notice and send it immediately to its 44 million cardholders."
USAction called on Congress to enact stronger financial privacy regulations including not allowing banks or other financial institutions to share private information without a consumers' permission. The organization also asked the federal agencies that regulate privacy notices, including the Federal Deposit Insurance Corporation (FDIC) and the Federal Trade Commission (FTC), to enforce the current regulations that require that the privacy notice be clear and understandable.
"Banks are flunking the consumer privacy test," Blum said. "Will Congress and federal regulators also flunk the test of protecting consumers' private financial information?"
"Your Privacy is Important to Us?: A Report Card on How Bank Privacy Notices Discourage Consumers from Exercising the Right to Financial Privacy was prepared by USAction by its New York affiliate, Citizen Action of New York. USAction, a grassroots consumer coalition organizing to win justice for all, represents over four million Americans. Information about the report is available at both the USAction and Citizen Action of New York websites:
www.usaction.org
www.citizenactionny.org |
See also:
http://www.usaction.org
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