2003-04-05 / Columnists

Notes On Consumer Affairs

By Assemblywoman Audrey Pheffer
Notes On Consumer Affairs By Assemblywoman Audrey Pheffer

Audrey PhefferAudrey Pheffer

Remember the excitement you felt as a child when you opened the mailbox and found an envelope addressed to you? Fast-forward to the present … you loathe the thought of removing the stack of "junk mail" all addressed to you. Unfortunately, some of the mail you believe to be junk could be the information needed to either stop or slow the barrage of unsolicited offers of credit and insurance. The letters you receive will sometimes contain privacy notices. The notices explain how your personal financial information may be used and shared as well as explaining how you can prevent some information from being shared.

There are numerous reasons why a financial institution may share information about you. These reasons include offering you more services, introducing new products, and the institution’s desire to profit from the information it has about you. Two federal laws that address this issue are the Fair Credit Reporting Act (FCRA) and the Gramm-Leach-Bliley Act (GLB). The FCRA protects the privacy of information from consumer reporting agencies. Under the law, your information can only be released to organizations that have certified that they have a purpose for obtaining your credit report such as evaluating an application for credit, insurance, or employment, or to rent you an apartment."

The GLB requires financial companies to inform you about their policies regarding the privacy of your personal financial information. The law limits the financial companies’ ability to share your information with certain non-affiliates (a company unrelated to your financial company). The main difference between the FCRA and GLB is that the FCRA allows you to opt out or prevent a company from sharing "creditworthiness" information with its affiliates, and the GLB allow you to opt out of information-sharing with non-affiliated third parties.

Privacy policies are discussed with you at the time you begin a business relationship with a bank, credit company, mortgage company, or other financial institutions. This information can also be mailed to you soon after the relationship begins and you will have a reasonable time - usually 30 days - to opt out. If you do not opt out initially, you can always contact your financial institution and ask for instructions on how to opt out. However, your personal information that had been given out prior to opting out cannot be recovered.

Recognizing the importance of personal information and the significance of companies disseminating the correct information, I have introduced bill A.1562. This bill would permit consumers to receive one free credit report per year. Because the sharing of your personal financial information cannot be completely halted, it is imperative that consumers know what information is on their credit report so that they can insure that the information is correct.

Finally, your personal financial information may be sent to lenders and insurers who, based upon that information, will send you offers of credit and insurance. This is known as prescreening. You can opt out of receiving these prescreened offers by calling the Credit Reporting Industry Prescreening opt out number at 1-888-567-8688.

So, remember, next time you receive mail that you deem junk, make sure you do not inadvertently throw away your opt out opportunity.


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