July 1, 2001 Passes Quietly
The passing of the July 1 privacy notices date passed with almost the same deafening noise as Y2K. Consumers barely glanced at the average of 10 privacy notices they received, and the American Bankers Association survey of 1000 consumers showed 66%, 2 out of 3, people either didn't remember getting them, or they got them and didn't read them. Evidently the other 33% read them and most didn't care, according to the very low response rate. The numbers reported by the Motorola Employees Credit Union in Scottsdale, Arizona were fairly typical. They mailed out 54,000 notices and received a little over 100 responses. The National Bank of Arizona did better. Out of 45,000, they said several hundred people called.
Consumers groups are not satisfied with either the notices or the responses, and are lobbying for further action on the part of the government. The Privacy Rights Clearinghouse claims that of the 34 privacy notices they read, the notices were written at a third-year college reading level instead of the junior-high-level that was recommended, and that there were 24 words per sentence instead of the 15 to 20 recommended.
Industry watchers have criticized the banking industry because they have not lobbied more strongly in favor of sharing information, and illustrating the benefits of sharing information to their customers. The consensus is that unless the financial industry starts to make a real effort to accomplish better communication with their customers regarding the privacy issue, that the government may introduce further legislation similar to the Gramm-Leach-Bliley.
Copyright © 2001 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 11, No. 8, 8/01
First published on 08/01/2001