- The Washington Times - Thursday, August 30, 2001

Online banking and mortgage brokerage firms give consumers little control over how they use the personal data customers submit to Web sites, according to a new study.
Some financial Web sites also fail to include information about their privacy practices, the Center For Democracy and Technology said in its study, released yesterday.
The privacy group is threatening to file a complaint with the Federal Trade Commission because of that apparent violation of the Gramm-Leach-Bliley Financial Services Modernization Act, said Ari Schwartz, the group's associate director.
The center says it is too hard for consumers to prevent financial Web sites from disclosing personal data with affiliates companies co-owned by a bank's parent company or with outside firms like marketing companies.
Only 22 of 100 Web sites surveyed by the privacy-advocacy group give consumers convenient, adequate privacy measures, the study said.
The study is relevant because an estimated 24 million consumers have done some banking online, according to the Pew Internet & American Life Project, a nonprofit research initiative in the District.
Banks, too, have embraced the Web. About 80 percent of all major U.S. banks let customers do some banking online, said Jim Bruene, editor of the industry newsletter the Online Banking Report, based in Seattle.
Consumers can prohibit all financial institutions from sharing information with companies that aren't owned by the same corporation that owns the bank where they do business, under the terms of Gramm-Leach-Bliley Financial Services Modernization Act, in effect since July 1. They do that by making use of an opt-out provision. Unless consumers opt out, though, financial-services companies can share data.
Financial Web sites should make it easier for consumers to opt out of information-sharing practices so consumers don't end up on marketing lists, Mr. Schwartz said.
In most cases, financial Web sites require consumers to opt out by making a phone call or mailing a form, according to the privacy group.
Thirty-four of the financial Web sites surveyed offered consumers no method online to give consumers control of personal data.
Forty of the financial services Web sites surveyed failed to give consumers the opportunity online to stop banks from sharing data with unaffiliated companies.
All banks and other financial services companies have to comply with the new Gramm-Leach-Bliley law, and that points to a flaw in the new study, American Bankers Association Senior Counsel John Byrne said.
"Information you provide to a bank, whether it's online or off line, is still governed by Gramm-Leach-Bliley," Mr. Byrne said of the law named after its sponsors, Sen. Phil Gramm, Texas Republican; Rep. Jim Leach, Iowa Republican; and Rep. Thomas J. Bliley Jr., Virginia Republican. The latter has since retired from Congress.
Even if privacy groups don't like the method that banks use, he said, the firms still are obligated to follow the law and offer some protections.
The study said small mortgage lenders were least likely to offer consumers a convenient method to opt out of information sharing or to inform consumers about their data-protection practices. Mortgage lenders responded angrily.
"No one has contacted us and I think it's really shoddy to put us in their report, but not call us. I think it's dishonest," said Robert Colson, chief executive of Utah-based Online Mortgage Corp.
Mr. Colson said privacy information is on the site.
"We believe in keeping people's information private, and our intent is to comply not only with the letter of the law, but with the spirit of the law," Mr. Colson said.


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