New report grades banks, insurers and brokers on financial privacy.

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Tuesday, September 2nd, 2008

The Consumer Federation of California Education Fund, a nonprofit not affiliated with Consumers Union, has issued a “Financial Privacy Report Card,” describing the privacy policies of banks and other financial institutions doing business in California. The report examines 61 financial institutions. Nineteen of the companies filled out the Consumer Federation’s survey on their privacy practices, four more answered the questions by letter, and information was found on company websites and notices for most of the rest.

Consumers Union agrees with this statement from page 3 of the report: “Make no mistake – large banks and other financial institutions still have a long way to go before we can be assured that our privacy is the industry’s genuine concern.”

Consumers Union endorses requirements for “opt-in,” giving consumers to choice about who gets to see their sensitive personal information. The CFC found that two of the 61 companies it sought information from don’t share information with non-financial third party businesses unless the consumer affirmatively “opts-in” to having the information shared. Half the surveyed companies either did not share personal financial information with their partners in joint marketing, or did not share it unless the consumer had opted in. Federal law doesn’t give consumers any right to stop this type of sharing, so take a look at which category your bank, insurer and broker falls into.

On the “bad news” side, half the companies surveyed either never responded or refused to provide the information requested. Many of the companies covered in the report operate in multiple states. Find out how your financial institutions did here.

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