Chase Manhattan Bank USA N.A., one of the nation’s largest banks, and e-mail service provider InfoBeat, a subsidiary of Sony Music, Tuesday settled allegations of deceptive business practices levied by New York Attorney General Elliot Spitzer.
As a term of the settlement, the two companies separately agreed to stop routinely sharing personal or financial information about their customers with telemarketers and advertisers.
Although Wilmington, DE-based Chase denied any wrongdoing, including violating its published privacy policies, it agreed to tighten its policy on information sharing. It will only make the names, addresses and telephone numbers available to third parties, unless the customer requests complete privacy.
The bank also agreed to make its privacy policies more easily understood by its customers and to pay the attorney general’s office $101,500 to cover the costs of its investigation.
Several calls to Chase spokeswoman Judy Miller for comment were not returned by press time.
Chase is alleged by the attorney general to have transferred some 20 items of information each on as many as 18 million credit card and mortgage holders nationwide, including home address, credit card purchases, finance charges, credit lines and balances, customer numbers and yearly amount of purchases. The data was shared with four unnamed marketing companies in return for commissions on sales of up to 24%.
Separately Denver-based InfoBeat admitted violating the privacy policy posted on its Web site when it provided advertisers with the personal e-mail addresses of its clients last fall. A spokesman for the firm, which agreed to repay the state’s $75,000 investigative costs, attributed the violations to a computer software error which has since been fixed.
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