Editorial: Minimum safeguards for privacy

Thursday, Feb. 10, 2000 | 9:28 a.m.

Federal regulators are charting the right course in developing rules that will make it somewhat more difficult for financial companies to sell personal information about their customers to outside marketing firms. The proposed regulations would prohibit these companies from selling "nonpublic" information -- including customers' names, addresses and telephone numbers -- to outside firms if the customer requests that this information be blocked.

While this is better than nothing, the best policy would be a requirement that financial companies must first get the consent of the consumer before any information is released. Placing the burden on the consumer to track down the company, and then ask that a hold be placed on sensitive data and information, is unreasonable. But given the current political climate in Washington, where privacy rights don't merit the serious consideration they deserve, this probably is the best deal the public will get.

After all, don't forget that last year President Clinton and Congress pushed through legislation that overhauled the financial services industry, legislation that unfortunately has a dark side, which will harm privacy rights. This law is great for financial companies, since it allows banks, investment firms and insurance companies to merge. But what worries privacy advocates is the law also gives financial companies, which are under the same corporate umbrella, the authority to share with each other a customer's private records -- without ever having to get the customer's permission.

Even though they got everything they wanted in the financial services legislation, the Associated Press reported last week that some banks are objecting to the proposed privacy regulations, claiming that they take a too sweeping view of privacy protection. Catherine Pulley, a spokeswoman for the American Bankers Association, said the group wants to "look more closely at the regulations." Give us a break. These regulations hardly are onerous on businesses. If anything, even if these regulations are adopted, consumers still will be at risk.

There is no reason why any business should be allowed to sell a customer's personal information -- without his consent -- to a marketer. The privacy regulations should be adopted despite the banking industry's reservations. It's bad enough that the privacy rights of consumers were eroded by last year's financial services industry legislation -- there's no need to rub salt into the wound by shelving these minimum requirements.