Checking out the opt outs

Americans are telling telemarketers to take a hike. The Federal Trade Commission's Do Not Call Registry went into effect in October 2003 and consumers have been wearing out their index fingers registering 97 million phone numbers. Telemarketers must routinely purge their lists of those numbers or risk a heavy fine if they call the consumer and the violation is reported.

A privacy rights expert says the Do Not Call Registry is probably the most successful opt-out service in terms of how well it works.

"Individuals who register find that the number of telemarketing calls they're getting approaches zero," says Beth Givens, director of the San Diego, Calif.-based Privacy Rights Clearinghouse.

Registering a phone number is easy. The FTC Web site provides a step-by-step guide in English and Spanish for registering a number, verifying the registration and filing a complaint.

Another opt-out service that works well, says Givens, is 888-5OPTOUT, which lets consumers curtail pre-approved credit and insurance offers.

"In two or three months you'll notice a dramatic decrease in the amount of mail you receive. The problem is it's not as well known as the Do Not Call service."

That problem should soon be remedied as a new Federal Trade Commission rule took effect Aug. 1, 2005, requiring companies that send prescreened offers of credit and insurance to provide simple and easy-to-understand notices that tell you about your right to opt out of receiving future offers.

A short notice that's easy to see must be on the first page, with a more detailed explanation elsewhere in the offer.

One aspect of 888-5OPTOUT that makes many consumers uncomfortable, Givens notes, is that you're required to leave your Social Security number along with other pertinent data in a recorded message.

But 888-5OPTOUT doesn't stop financial institutions you do business with from sharing or selling information about you with third parties. To do that you have to rely on the Gramm-Leach-Bliley Act, the financial privacy law that, among other things, gives consumers some say-so over how their personal information is used. Givens calls it the weakest of the opt outs.

"It's the epitome of the dysfunctional opt out. It's so weak. Customers can only say no to the sharing of data with third parties, and not all third parties at that. Companies can still share with the ones they have marketing deals with.

"Most of the opt-out notices have been written in a way that's difficult to understand. It's improved somewhat, but the actual opt out is at the end of the notice. It's pretty much hidden."

Financial institutions must give you opt-out information when you open an account. Even though you can opt out at any time, institutions must notify you annually of your right to opt out. Many banks admitted that the first round of opt-out notices sent to consumers, in 2001, were lengthy and hard to understand. Some banks, as Givens mentioned, worked to make subsequent notices more consumer friendly.

American Bankers Association spokeswoman, Laura Fisher, says some institutions may not have the wherewithal to redo their notices.

"The wording is complicated because the regulation is complicated. Some of the bigger banks may have attorneys who can simplify the language, but other banks may have to follow it to the letter."

Fisher says the industry doesn't maintain statistics, but the estimate is that 5 percent to 7 percent of banking customers have chosen to opt out.

Consumer advocates contend that privacy laws in the United States are weak, still favoring businesses over the individual consumer. A few states, such as California, stand out in terms of affording residents stronger privacy rights.

Experts say we'd all be better off if "opt in" were the norm. In other words, companies wouldn't be able to share your data unless you specifically gave your OK. Additionally, experts say identity theft could be curtailed if all consumers had the right to freeze access to their credit report. Freezing prevents lenders from accessing your credit report without your permission, and that means identity thieves won't be able to get credit in your name. A growing number of states are giving residents the opportunity to do this.

Perhaps the recent rash of data theft that has been front-page news will lead to a nationwide strengthening of privacy laws, but until then, it's wise to do all you can to safeguard, not only your financial information, but other bits and pieces of the puzzle that make up your profile.

For instance, Givens advises against using supermarket loyalty cards, which enable marketers to track your purchases.

"The typical large supermarket has food, a pharmacy, alcohol, tobacco and magazines. That says so much about you. California has a law prohibiting data collection from supermarket cards from being shared with third parties. Profiling is one of the bigger privacy issues of our day, and our privacy laws don't really touch it."

Take a few minutes to review our list of some of the best ways to opt out of receiving annoying phone calls and mailings, and do what you can to keep the sharing of your financial data to a minimum.