Consumer Payment Card News

Opt Out Rumor

Part of the fallout of the new privacy laws that took effect this month is misinformation. A widely circulated anonymous email claims that under the new law, credit bureaus now have the right to release personal consumer information to anyone. However the new law does not apply to credit bureaus. The Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which went into effect July 1, allows financial institutions to merge and share information among themselves and third parties, unless a consumer opts out. Here is a copy of the misinformed email, followed by a response from the credit bureaus.
EMAIL TEXT

Hey,

Thought this info might be helpful to some, if not all, of you. This was
passed to me. I tried it and it works.
Just wanted to let everyone know who hasn’t already
heard, the four major credit bureaus in the US. will be
allowed, starting July 1, to release your credit info,
mailing addresses, phone numbers….. to anyone who
requests it. If you would like to ‘opt out’ of this release of
info, you can call 1-888-567-8688. It only takes a couple
of minutes to do, and you can take care of anyone else
in the household while making only one call, you’ll
just need to know their social security number. Be sure
to listen closely, the first opt out is only for two years,
make sure you wait until they prompt you to press ‘3’ on
your keypad to opt out for good.

RESPONSE FROM CREDIT BUREAUS

The e-mail states that a new law went into effect July 1, which allows credit bureaus, “to release your credit info, mailing addresses, phone numbers…to anyone who requests it”(sic). It then goes on to provide a phone number so the consumer can opt out of having this information released. First, there was no such law that took effect July 1. The law that did go into effect on that date covers financial institutions like banks, insurance companies and brokerage firms. It states that these institutions cannot provide a customer’s, “nonpublic personal information,” to third parties without a consumer’s consent. To meet this standard, lenders have been sending out disclosure statements to consumers noting that they have the right to opt out of having their, “nonpublic personal information,” shared. It’s important to point out that credit reporting agencies are exempt from this law. Congress understood that data from lenders must be shared with credit reporting agencies in order for credit granting decisions to be made. Likewise, Congress knew that the same type of information had to be provided to a lender when a consumer was requesting credit from that lender so that a lending decision could be made.

The opt out information contained in the e-mail is correct and is not new. The credit reporting industry has been providing toll-free opt out numbers to consumers for years. In fact, when the Fair Credit Reporting Act, the federal law that regulates credit bureaus, was amended in 1996, it incorporated an opt out system similar to that being used at the time by credit reporting agencies.

The opt out number given in the e-mail, 1-888-567-8688, (1-888-5OPTOUT) is the credit reporting industry toll-free number that enables consumers to opt out of inclusion on any mailing list for pre-approved offers of credit generated by the major credit reporting agencies. It has been available to consumers since 1997. We have always encouraged those consumers to contact us if they want to opt out of receiving pre-approved credit offers. At the same time, since the mailings generated by credit reporting lists are a fraction of the total, we have told consumers they might want to contact others who provide direct marketing services as well.

There is one other major error implicit in the e-mail. Credit reporting agencies do not provide personal consumer data to, “anyone who requests it.” Federal law prohibits the disclosure of consumer credit data to anyone other than for a, “legitimate business need,” and a, “permissible purpose,” under the provisions of the Fair Credit Reporting Act. In short, a consumer credit report is provided to legitimate businesses for the purpose of making a determination on the extension of credit and other consumer benefits. Associated Credit Bureaus, Inc.

Leave A Reply