U.S. Bancorp Settles Privacy Suit

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U.S. Bancorp, Minneapolis, said yesterday that it agreed to pay $3 million to settle a privacy-related lawsuit and to reimburse customers who were not satisfied with products or services purchased via telemarketing conducted on behalf of the bank. In addition, the bank holding company, which is parent of U.S. Bank, agreed to inform customers of their right to "opt out" of having their names used for marketing purposes and to inform them of its privacy policy.

U.S. Bancorp did not admit any wrongdoing in the case, in which Minnesota Attorney General Mike Hatch had accused the company of providing confidential information about its customers to MemberWorks, a Stamford, CT, affinity marketer that uses telemarketing and other means to offer products and services to customers of banks and other organizations.

"Given U.S. Bancorp's early industry-leading decision to stop disclosing customer information to third parties for purposes of marketing non-financial products, we felt in was in the public interest to resolve the lawsuit," Hatch said in a prepared statement.

The bank agreed to pay an amount equal to the revenues it received from cooperative marketing programs. The payments include $1.5 million to chapters of Habitat for Humanity in Minnesota, $500,000 to the state of Minnesota and just over $1 million to charities or other public bodies in other states in which the bank does business.

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