Banks that offer online services are not allowing consumers to opt out online. And that's a problem, according to the Center for Democracy & Technology (CDT), which just completed a study of online banking practices.
Of 100 banks that conduct transactions online, only 22% provide customers with "equally convenient" means of preventing the sharing of information with other companies. For the other 78%, consumers must call toll-free numbers or send in paper requests, the group states.
Moreover, some mortgage lenders fail to post online privacy notices at all, putting them in violation of the Gramm-Leach-Bliley financial modernization act, the group alleges.
The CDT has also written to the Federal Trade Commission, charging that several mortgage lenders are not complying with the act.
The letter alleges that these firms ask for personally identifiable financial information from applicants, but that they must therefore meet initial privacy notice requirements.
However, the firms had not as of Aug. 28 posted "proper clear and conspicuous initial to customers on their Web sites."
The lenders include Advantage Mortgage, Ameriwest Mortgage, Central New England Mortgage, GM Mortgage, and Online Mortgage Corp.
The American Bankers Association has countered that protections are adequate, and that consumers do have means of opting out.
Gramm-Leach-Bliley required that banks and other financial institutions send privacy notices to customers, allowing them to opt out, by July 1.
