FTC, Credit Bureaus Try to Correct Misleading Mystery E-Mail

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The FTC and Associated Credit Bureaus have taken steps to clarify a chain e-mail that made incorrect claims about the Gramm-Leach-Bliley Financial Modernization Act's July 1 deadline for financial institutions to provide clear disclosure of their privacy policies.


"Basically, the e-mail is a mixture of half-truths and falsehoods and has caused people needless worry," said Donald Girard, director of public relations at Orange, CA -based Experian. "I think the sender may have been trying to accomplish something noble. It just didn't work."


The e-mail, which began circulating last month, began: "Just wanted to let everyone know who hasn't already heard, the four major credit bureaus in the U.S. will be allowed, starting July 1, to release your credit info, mailing addresses, phone numbers ... to anyone who requests it."


It gave a toll-free number and told recipients that they could call to opt out of having their data shared by pressing "3" during the recorded message and entering their Social Security number. It added that they could opt out everyone in their household if they had their Social Security numbers.


The toll-free telephone number is legitimate. It is the opt-out line set up in 1997 by the three major U.S. credit bureaus -- Experian, Equifax and Trans Union -- to allow consumers to opt out of receiving prescreened offers of credit and nothing more. But credit bureaus were never allowed to release personal information to anyone, and still aren't.


"The Fair Credit Reporting Act prohibits sharing of credit files without permission," Girard said.


Under the FCRA, only legitimate businesses with permissible purposes have access to consumer credit reports.


The July 1 date referred to in the e-mail has nothing to do with this toll-free line or the FCRA. July 1 was the deadline under the Gramm-Leach-Bliley Financial Modernization Act of 1999 by which banks and other financial institutions were required to provide clear disclosure of their privacy policies regarding the sharing of nonpublic personal information with both affiliates and third parties and provide notice to consumers and an opportunity to opt out of sharing nonpublic personal information with nonaffiliated third parties.


Shortly after the e-mail was brought to Girard's attention, the credit bureaus spoke with the Federal Trade Commission and their own trade organization, Associated Credit Bureaus Inc. The ACB, which has 240 members, issued a news release explaining the e-mail's inaccuracies.


It is unknown who created the e-mail or how many people read it. Nor is there a way to know how many consumers opted out using the credit bureaus' toll-free number, Girard said. An independent firm monitors the line, and the number of calls is not tracked, he said.


"The Internet is a wonderful tool for communication and finding information," said Norm Magnuson, vice president of public affairs at Associated Credit Bureaus, Washington. "Unfortunately, you see in this instance one of the shortfalls is that it is not necessarily a source of reliable information or vetted information all the time."


The FTC posted a consumer alert on its Web site spelling out the factual errors within the e-mail and offering consumers more information on privacy. The page got 1,794 hits from July 27 when it was posted through July 31, an FTC spokeswoman said, though she could not say how many unique visitors viewed the page. Numbers for August were unavailable. She said the FTC site gets about 10,500 visitors per day.


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