U.S. state attorneys general and consumer advocates told Congress Thursday that financial privacy has eroded under recent laws that were intended to safeguard consumer privacy, according to wire service reports.
State officials and others told the Senate Committee on Banking, Housing and Urban Affairs that the overhaul has opened to the door to abuse by telemarketers and is baffling to customers of financial institutions.
Minnesota Attorney General Mike Hatch and Vermont AG William Sorrell said that the ability of financial institutions to share coded account numbers for marketing purposes is particularly troubling. The practice, known as preacquired account telemarketing, allows telemarketers or others to charge consumers unknowingly, the attorneys general contended.
Hatch, Sorrell and other witnesses urged Congress to allow states to pass stronger financial privacy protection laws. A provision of federal law that preempts more protective state laws is scheduled to expire at the end of 2003.
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