Three years after Congress took action, financial companies are getting final rules for revealing what they do with their customers’ personal information.
Eight federal agencies today revealed rules behind a “model privacy form” that has been tested to provide consumers with easier to read information companies’ customer information-sharing policies.
A model form is two pages long, features large headlines, text, and neon pink accents that suggest an informational marketing brochure. The new rules were part of the Regulatory Relief Act of 2006, passed on October 13 of that year.
“The model privacy form released today will enable consumers to better understand and compare how these types of companies handle their personal information without having to wade through pages of legal mumbo-jumbo,” said David Vladeck, a director for the privacy form project at the Federal Trade Commission.
He said the forms will feature plain-language in a user-friendly format. In certain cases, consumers will be allowed to opt out of certain types of personal information sharing.
“In short, this form will empower consumers to better understand their rights in this area and exercise them, if they so choose,” Vladeck noted.
Certain aspects of the new rules will become mandatory within 30 days while others won’t be effective until the end of 2010.
Among the concerns of some financial companies were that the new forms would not adequately explain complex policies which cannot be easily explained with “yes” or “no” statements.
In addition, there were concerns among some smaller institutions that customers would be surprised about the disclosures, believing that the institution was changing its policies.
Institutions that accept the model form will be granted a “legal safe harbor.” However institutions may continue to use other types of notices that vary from the model form so long as the notices comply with the privacy rule.
See detailed privacy rules and explanations of implementations ( 170 pages)
See the opt-out version of the model privacy form below:
Privacy Model Form for Financial Companies