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Banks sharing customer information seems to cause little concern

This is about the time of year that people start receiving bank privacy notices in the mail. It might be worth taking the time to actually read the fine print if you want to opt out of your bank sharing your information with businesses affiliated with the bank or even outside third parties.

People might assume that you have to “opt in” in order for your bank or credit union to share personal financial information with affiliates associated with the banking institution. But actually customers must “opt out” if they don`t want that information shared. A toll-free number can be called for consumers who want to opt out of sharing.

There can be a lot of information sharing in some instances. For example, some of the nation`s biggest banks have literally thousands of affiliates.

Recently a lengthy article appeared in a major Coast newspaper warning consumers about banks sharing personal financial information with bank affiliates like insurance companies and outside companies such as discount travel brokerage firms. The consumer program director at the U.S. Public Interest Research Group in Washington, D.C., was quoted as saying he didn`t sign up to do business with 1,300 affiliates.

“I didn`t sign up for all of them to know everything about me,” he said.

But it appears local banks got little, if any, response from concerned customers as a result of the article.

Chevis Swetman, chairman, president and CEO of The Peoples Bank in Biloxi, said they didn`t receive any calls from customers asking to “opt out” after the article appeared.

“Most people down here respect the right to privacy,” Swetman said. “We don`t have an insurance or brokerage subsidiary that we would try and share our list with. We don`t share our information, and thus we don`t really have the issues other people might have.”

Swetman said the bank used to provide a free $1,000 life insurance policy to all account carriers. The insurance company providing the free insurance could then contact the customer with an offer to purchase additional insurance.

“Something like this would be a joint marketing venture and is allowed under the privacy guidelines,” Swetman said. “But when the new privacy guidelines came out, we talked about it and decided to no longer offer the free policy because we felt the customer`s privacy needed to be respected more.”

Swetman said The Peoples Bank only shares account information with credit bureaus and check order companies, both cases where customers need to have their account information shared.

R. Paul Maxwell, corporate communications manager for Hancock Bank in Gulfport, agrees that customers apparently have few concerns about privacy issues.

“Hancock Bank does safeguard customer information very carefully and adheres to a very thorough privacy policy as outlined on the bank`s Web site (www.hancockbank.com) and distributed regularly to customers,” Maxwell said. “Often, the nature of our financial services relationship with a customer falls under even more stringent guidelines.

Occasionally, to inform our customers of financial services opportunities about which they might not otherwise be aware and to facilitate customers’ access to those services, we may share customer information discreetly and confidentially with Hancock Bank affiliates – for instance, subsidiaries such as Hancock Mortgage Corp., Hancock Investment Services Inc. and Hancock Insurance Agency. However, we do not sell confidential customer information to non-affiliated third parties.”

In those cases the only information shared is the name, address and phone number of people who might have an interest in or need for another product or service.

“We don`t share account numbers or balances, or anything like that,” Maxwell said.

Mississippi Banking Commissioner John Allison said the banks he has spoken with on the issue say very few customers opt out of sharing banking information. Allison said banks are allowed under the privacy laws to share information with affiliates, but most do not share it with any third parties.

Bankers say there can be advantages from information sharing.

“Customers absolutely benefit when we share information with AmSouth`s family of companies,” said Rick Swagler, spokesman for AmSouth Bank. “A survey Ernst & Young did for the Financial Services Roundtable says the average household saves $195 a year because of information sharing.”

The study said customers save time and money because of information sharing. Benefits include increased convenience, personalized service and discounts. Ernst & Young said customers provide information to their financial institutions because they trust them to protect that information and use it wisely.

“To the extent these companies share customer information with affiliates and/or third parties, the information sharing provides customers with more services at lower prices, and allows the companies to increase efficiency, lower costs, and pass savings forward to customers,” the study said.

Randy Burchfield, senior vice president of BancorpSouth in Tupelo, said BancorpSouth limits the collection and use of information about its customers to that which is necessary to administer business, provide superior service and extend offers the bank believes will be of interest to customers.

“BancorpSouth`s goal is to serve their customers as conveniently and effectively as possible and with the recognition that our customer`s relationship with BancorpSouth should always be treated with the appropriate confidentiality,” Birchfield said. “Customer privacy and confidentiality remain guiding principles upon which BancorpSouth`s services are based.”

BancorpSouth and its family of organizations, subsidiaries, divisions, departments and companies are permitted to share within the BancorpSouth organization information concerning a customer`s account history and experiences with BancorpSouth.

“We may also share among these same groups with BancorpSouth information someone has given us as part of an application for one of our products and services, or information such as income information and credit history that we have received from a consumer reporting agency or other third party, which is used to determine customer eligibility for credit or for some other product or service,” Burchfield said. “While it may result in customers not receiving product or service information of interest to them, we will, however, respect anyone`s wishes that we not share this type information. Customers may therefore direct us not to disclose to our affiliates this credit-worthiness/product-worthiness information that does not solely relate to BancorpSouth`s or its affiliates’ experiences or transactions with our customers or their accounts.”

Gray Wiggers, senior vice president, marketing director for Trustmark Bank, said the bank`s policy is not to sell information about customers to third parties.

“A customer may direct us not to disclose to our affiliates information that does not relate solely to our experiences or transactions by calling a toll-free number,” Wiggers said. “We are permitted, under law to share with our affiliates our experiences or transactions with customers or with customer accounts (such as account balances and payment history). We also may share with our affiliates additional information such as information received from customer applications and information from consumer reporting agencies unless the customer directs us not to disclose this additional information.”

In addition to sending out privacy notices, most Mississippi banks include instructions for opting out of sharing information on their Web sites.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.


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