Privacy scandal marred U.S. Bank’s final two years of independence

Wednesday, Oct. 4, 2000 | 11:25 a.m.

SUN STAFF AND WIRE REPORTS

U.S. Bancorp's final two years as an independent bank were marred by a scandal in which the Minneapolis-based bank was accused of violating the privacy rights of its customers by peddling private information to third-party marketing firms in exchange for commissions.

A federal judge last month approved a settlement of a privacy lawsuit between U.S. Bancorp's U.S. Bank and attorneys general of 38 states -- including Nevada -- and the District of Columbia.

The agreement is an extension of a $2 million settlement the company reached last year with Minnesota Attorney General Mike Hatch, who first accused the bank of violating customer privacy rights.

The other states will split $2 million in consumer restitution and monetary damages. In addition, U.S. Bank must make restitution to all consumers for unused goods or services they purchased from third-party marketers who originally obtained a consumer's information from the bank.

The bank will notify consumers who may be eligible for restitution.

The agreement called for Nevada to receive $66,666.

"This settlement is an important step in helping to better protect the privacy of bank customers," Nevada Attorney General Frankie Sue Del Papa said in a statement last month.

She said the agreement prohibits U.S. Bank from sharing "customer data" with unaffiliated third parties and requires U.S. Bank to provide customers with written information on how they can "opt out" of having their personal information shared with unaffiliated third parties.

The other states in the settlement are Arizona, California, Colorado, Connecticut, Delaware, Georgia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Maine, Massachusetts, Michigan, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Utah, Vermont, Washington, Wisconsin, Wyoming.