Electronic commerce has made it possible to purchase virtually anything from the privacy of your own home. But many people still hesitate to use their credit cards to make electronic purchases. While their fears are based on solid reasoning, purchases on the Internet may be the least of their worries.
Even if you never use your credit card, the fact that you have one puts you at financial risk. Banks can, and have, sold credit card numbers to businesses, telemarketers and scam artists. A San Fernando Valley bank sold 900,000 credit card numbers to a convicted felon, who altogether, bought 3.7 million card numbers. He used them to make more than $45,000,000 in purchases before police arrested him.
And, while the felon will serve time for his massive shopping spree, the banks that sold him the credit card numbers will not be prosecuted. Why? Because they broke no laws.
Currently, there is no law that protects personal financial information from being sold to the highest bidder. But wait. It gets worse. Congress recently passed the “financial modernization” act eliminating laws that have historically kept banking, securities and insurance companies separate. Consequently, the potential has greatly increased for personal, financial information to move freely be-tween your banker and securities broker. Worse still, your personal medical information can be easily accessed by your loan officer.
If you think switching banks could be the answer, think again. Banking industry experts predict that in the next few years, over 90 percent of Nevadans will use one of the state’s three largest banks.
Before you tear up your credit card and close your checking account, you should know there is proposed legislation that would protect your financial privacy. It’s called the Financial Privacy Act and it has being spearheaded by Nevada’s own, Senator Richard Bryan. Bryan is joined in sponsorship of the bill by co-Senate Banking Committee members, Senators Paul Sarbanes of Maryland and Chris Dodd of Connecticut.
The proposed legislation would prohibit institutions from releasing any financial data to unaffiliated third parties without special permission from the customer. The second part of the bill, which will be harder to pass, gives the consumer the right to forbid , their private information from being shared between affiliates of the same institution.
Since Bryan’s bill is in direct conflict with financial modernization efforts, affected industries are prepared for battle. Their position is that customers would benefit from the ability to purchase insurance, conduct banking, trade stocks and plan for retirement with one institution. The sharing of financial information between affiliates would make the process much easier for all concerned.
However, in this instance, the price for convenience is the elimination of privacy. And, as far as I’m concerned, the cost is too high. It is the role of our government to protect consumers from unscrupulous businesses practices, and we all have a right to privacy. Thank you Senator Bryan for introducing this important piece of legislation.