The Fourth Amendment to the U.S. Constitution spells out the right of citizens to be "secure in their persons, houses, papers and effects against unreasonable searches..." by their government. When that amendment was ratified in 1791, no one imagined that corporations, not governments, would be the ones exercising their vast power to invade the privacy of citizens and, in effect, carry out unreasonable searches of their most intimate personal data.
But, that is exactly what is happening, particularly among newly-formed giant financial conglomerates who have access to massive databases of information about millions of individuals, all of which has been provided by their far-flung insurance, bank, credit card, and securities affiliates. For this consumers can thank the Clinton Administration and a bipartisan group of Senators and Congressmen who lacked the courage to defend citizens' right to privacy when they passed the so-called Financial Modernization legislation in 1999. This law allows banks, securities firms, and insurance companies to merge as parts of a financial conglomerate. These giant corporations have the ability to assemble information that creates a head-to-toe profile of most citizens and their buying and personal habits, including what prescription and nonprescription health products they use, their investments, income, employment histories, and entertainment preferences.
People like Democratic Representative Ed Markey of Massachusetts and Republican Senator Richard Shelby of Alabama fought hard to give citizens the right to control where and when their personal information was sold or used in any manner that was not authorized in writing by the consumer-owner of the information. In short, under the Markey-Shelby approach, consumers would be the only ones with the authority to "opt-in," in writing, the use of their personal information. Without this written permission from the consumer, the corporations would not be allowed to sell, share, or use the data for any purpose beyond that specifically agreed to by the consumer.
The industry, however, believed that few consumers would give permission to have their information shared with unknown persons and corporations and threatened to walk away from the legislation if the Shelby-Markey opt-in was adopted. They lobbied for an opt-out system that would require consumers to send in a form indicating that they were opposed to having their information shared.
The Clinton Administration and a bipartisan majority in the Congress surrendered to the threats and left privacy protections to the financial industry's demand for a weak ineffectual opt-out approach. This laid the burden on the consumer to "opt out," and if they failed to send in the form or could not understand the legal jargon, the corporations would be free to distribute the personal information to anyone they chose.
The industry has sent out more than a billion of these opt-out notices as required by law. Most of them have been stuffed in with the variety of miscellaneous promotional brochures that accompany monthly billing statements. Financial consultants who are following the issue estimate that only about five percent of the opt-out notices are being returned – the remainder tossed in the trash unnoticed and unread.
The fact that many of these notices are written clumsily with little attempt to explain the consumers' rights in clear understandable language has rendered the opt-out approach nearly useless. To make matters worse, some of these opt-out notices appear to have been copied verbatim from technical federal regulations without being translated into language that would help consumers take proper action to protect their privacy.
"People don't read them, and they don't understand them," Karen Petrou, a leading financial consultant told a banking conference in Washington recently. That was exactly what the financial lobbyists were betting on when they pushed the opt-out language on a willing Congress.
Despite the shortcomings of the opt-out approach, consumer organizations and the media should do everything possible to publicize the existence of the opt-out possibilities and to encourage consumers to protect their privacy by sending in the opt-out forms immediately. But the only truly effective means of controlling the wholesale invasion of privacy is for Congress to flatly prohibit the distribution of personal information unless the consumer has specifically authorized it in writing in advance.
Your personal information belongs to you. You do not authorize its wholesale distribution just because you have provided information to a bank for a specific limited purpose such as a home mortgage.
The bank should not have the right to sell or share that information for any other purpose unless you authorize it in writing and know specifically what information is being released and to whom.
Your personal information is your personal property. You should demand that the financial institutions you deal with treat it as such. And you should demand to know how your Congressman voted when the Financial Modernization Act was adopted in November 1999, with a weak industry-supported opt-out provision attached.
For further information on privacy, contact:
U.S. PIRG, 218 D Street, SE
Washington, D.C. 20003
http://www.pirg.org/consumer/optout.htm
