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Credit Card Privacy
August 1st, 2013
Credit Card Privacy
It's no secret that the world in which we live is filled to the brim with information. Billboards constantly shout for our attention as we putt along on the highway; time spent watching TV commercials nudges ever closer to equalling that of the programs themselves; and nearly any question held by an individual can be answered with only a few clicks of the keyboard. Clearly, the modern world is information-driven.
But what about you? What about your information? Just how much of it is out there, and what can be disclosed to a third party? If you've asked yourself these same questions, you're not alone. More Americans than ever are taking the time to educate themselves about the privacy of their non-public information. And because almost every citizen over the age of 18 has experience with a bank, in one form or another, credit card privacy ranks high on their list of concerns.
However, credit card privacy is a vast topic that encompasses a wide range of material. Spanning many arenas, it spills neatly over into areas such as consumer rights, the ever-increasing epidemic of fraud, credit reporting agencies, the legal system, and even the relationship between you and your bank.
And it's this last one that you as a consumer will need to address with your bank at some point. Credit cards are a fact of life for most Americans, which means that there is more information about them floating around than ever before. However, most of these individuals have never taken the time to read their credit card privacy statement, which outlines how their non-public information is gathered and handled.
What Is Credit Card Privacy?
When thinking about credit card privacy, most individuals immediately picture an unsavory thief, greedily digging through their private information, intent on stealing their identity in order to go on a shopping spree. And there is good reason for this. According to the Consumer Sentinel Network within the U.S. Department of Justice, as of July 2012, one in every 10 Americans has been the victim of credit card-related fraud. In fact, 40 percent of all financial fraud is affiliated with credit card use, and has a global impact of $5.55 billion annually. Clearly, identity fraud is an ever-increasing problem facing many Americans.
However, the root cause of most identity theft is improper sharing of an individual's non-public information, which is defined as "data not freely available to the public, and legally protected from disclosure." In other words, some of your information is publicly available through tax rolls, but you will never have to worry about having your most recent W-2 posted for all to see. Simply, some information is private, and some is public.
We've already discussed some of the questions you as a consumer may have regarding information your public information, but how does is specifically relate to your credit card? And where in the world can you find out? Your card issuer's privacy statement is the first place you should look.
The Credit Card Privacy Statement
In 1999, President Bill Clinton signed into law the Gramm-Leach-Bliley Act, which among many other things, completely changed the way that corporations handled their customers' nonpublic information. First, the Act stated that this information must be protected from security threats. Second, the Act made it a law that every consumer must receive an annual privacy notice from each of their lenders, and each lender must have an information security plan written and enforced to protect their consumer's information.
As a consumer, the biggest impact this law had on "business as usual" was the annual disclosure of your privacy rights as a credit card holder. Let's take a more in depth look at what this legislation entailed, and how it affects you.
What is a Credit Card Privacy Statement?
Because of the Gramm-Leach-Bliley Act, each financial institution is required by law to have, and to freely distribute, a credit card privacy statement. However, the Act does not stipulate that all agreements have to appear in the same format, only that they inform the consumer about all non-public information they collect, and how this information is shared.
What information is collected - The card issuer must clearly outline what personally identifiable information they collect from each of their consumers, including name, address, phone number, email address and so forth. The issuer must also outline how this data is collected; i.e. via online forms, through an email exchange, participation in marketing activities, or from forums and blogs outside the immediate scope of the financial institution. They must also summarize non-personally identifiable information collected through the use of technology, such as online "cookies" and IP tracking.
How the information is shared - The card issuer must also inform consumers about how their personal data is to be managed. Will it be used to simply aid with a transaction, or will it be sold to affiliated companies? Will consumer data only be used to customize their site content, or will it be doled out to a third party vendor?
Your Credit Card Privacy Rights
According to the Federal Trade Commission, consumers have the legal right to opt out of services related to the privacy of their non-public information. These services include sharing of information with unaffiliated companies, or with other parties unrelated to the corporation who is issuing the statement. In other words, if you don't want your American Express information shared with, say, Capital One, you have the right to do so, as long as the two companies never merge.
However, there is some information a consumer cannot opt out of sharing, including:
- Data relating to a legal matter,
- Marketing efforts by the financial institution, and
- Third-party businesses that service the corporation's accounts.
For example, if a consumer is being litigated against and the information contained in their file is pertinent to the case, this data may be commandeered. Or, the corporation may review its' consumer database for ideal clients that could benefit from their new product or service. In addition, if a lender hires a third-party company to service its account, opting out will not prevent your information from being visible.
When You Receive Your Statement
When a consumer receives their credit card privacy statement, it will contain several key pieces of information, including sharing options that can be opted out of, how to opt out, how long they have to opt out before the information is shared, and how to contact the company should they have any questions. Even if an individual has been with a lender for a long period of time, it is always a good idea to read the material each year as they arrive, since credit card privacy statements can change over time.
Most comprehensive privacy statements will include several sections that outline the different types of information collected, and who the information is shared with. These statements will also tell the consumer what entities the document applies to, a definitions section, as well as important information, such as states where information sharing is more tightly restricted.
If an individual accidentally loses one of their credit card privacy statements, the issuer's website will almost certainly contain a copy. Online services are also a great way to learn more about the company's information handling policies, as well as to electronically opt out.
The most important idea a consumer should remember is that they have the legal right to know what information is shared about them, and how that information is used. Now that you know what a credit card privacy statement is and why they became mandatory, take a few moments to read through yours. As a matter of fact, we would suggest writing down all your credit cards, and visiting the issuer's site to full take command of your private information. To make it a little easier, please find a few of the major credit card companies listed below.