Understand Your Privacy Rights

Companies involved in financial activities must send their customers privacy notices, including:

  • Banks, savings and loans, and credit unions
  • Insurance companies
  • Securities and commodities brokerage firms
  • Retailers that directly issue their own credit cards (such as department stores or gas stations)
  • Mortgage brokers
  • Automobile dealerships that extend or arrange financing or leasing
  • Check cashers and payday lenders
  • Financial advisors and credit counseling services
  • Sellers of money orders or travelers checks

If you prefer to limit the promotions you receive or do not want marketers and others to have your personal financial information, you must take some important steps. First, it is important to read these privacy notices. They explain how the company handles and shares your personal financial information.

What Can You Stop ­- and What Can't You Stop?

Federal privacy laws give you the right to stop (opt out of) some sharing of your personal financial information. The law permits your financial companies to share certain information about you without giving you the right to opt out.

Among other things, your financial company can provide to non-affiliates:

  • Information about you to firms that help promote and market the company's own products or products offered under a joint agreement between two financial companies
  • Records of your transactions - such as your loan payments, credit card or debit card purchases, and checking and savings account statements -- to firms that provide data
  • processing and mailing services for your company
  • Information about you in response to a court order
  • Your payment history on loans and credit cards to credit bureaus

What Opting Out Means

If you opt out, you limit the extent to which the company can provide your personal financial information to non-affiliates. If you do not opt out within a "reasonable period of time" -- generally about 30 days after the company mails the notice -- then the company is free to share certain personal financial information.

If you didn't opt out the first time you received a privacy notice from a financial company, it's not too late. You can always change your mind and opt out of certain information sharing. Contact your financial company and ask for instructions on how to opt out.

Remember, however, that any personal financial information that was shared before you opted out cannot be retrieved.

Your Right to Opt Out

A privacy notice contains information about the company's data collection and information sharing policies. If a financial company does not plan to share your information except as permitted by law, the notice will tell you this; in this case, you don't have a right to opt out.

Non-affiliates. If you have the right to opt out (that is, if the company plans to share your information), the privacy notice will include instructions on how to opt out of sharing some information. Unless you opt out, your financial company can provide your personal financial information (for example, information on the kinds of stores you shop at, how much you borrow, your account balances, or the dollar value of your assets) to non-affiliates for marketing and other purposes.

Affiliates. The privacy notice may also give you the right to opt out of certain information sharing with affiliates. For example, if a company intends to provide an affiliate with personal information from your credit report or loan application, you will usually first be given a chance to opt out. Companies, however, can share information about you with affiliates when the information is based solely on your transactions with that company (transaction information includes whether you pay your bills on time, the type of accounts you have with the company, and so forth). Read your notices carefully to see if this type of opt out applies.

Credit bureaus may also sell information about you to lenders and insurers who use the information to decide whether to send you unsolicited offers of credit or insurance. This is known as prescreening. You can opt out of receiving these prescreened offers by calling 1-888-567-8688.

What to Do When You Receive Your Notices

  • Read all privacy notices.
  • Get answers to your questions from your financial company.
  • If applicable, decide whether you want to opt out.

If you want to opt out, follow the instructions in the notice -- and, if necessary, shop around for a financial institution with the privacy policy you want.