Banks and Credit Bureaus Tied To Spam Epidemic Due To Lack of Privacy Laws;

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U.S. Senate Is Poised to Codify Practice

FTCR seized on new evidence today in the New York Times that banks and credit bureaus are behind the spam epidemic to call on U.S. Senators to stop their efforts to allow those corporations to share information for unlimited purposes despite state laws to the contrary.

The fine print of two U.S. Senate bills will allow the nation’s largest corporations to send unlimited spam email and sell a consumer’s private financial information among affiliates even if they say “no.” Both bills would gut more protective California laws and pre-empt all future state legislation.

To dramatize the need for stronger privacy laws, the Foundation for Taxpayer and Consumer Rights (FTCR) hired a professional skywriter to disclose the first five digits of Citigroup CEO Charles Prince’s Social Security number over New York City last Friday. A photomontage of the first five digits of Prince’s Social Security number is available for downloading at

“Now that we know that the biggest banks and credit bureaus are responsible for the tsunami of spam, the Senate has no choice but to shut down the trade of that information or risk a populous backlash,” said Jamie Court president of FTCR and author of Corporateering: How Corporate Power Steals Your Personal Freedom’ And What You Can Do About It (Tarcher/Putnam). “Corporate families cannot be trusted to protect our privacy even when a consumer says no to information sharing.”

One of the Senate bills, approved unanimously last week, would codify corporate practices of sending unsolicited marketing offers by email and allow companies to share or sell email lists with others. Credit reporting bureaus, like Equifax and Experian, buy email addresses and link them with other consumer databases including credit card purchasing histories and medical records. This information is sold to marketers who target consumers with specific traits like similar medical conditions and purchasing habits.

A new California law would impose much stricter spam protections by requiring that email marketing offers to consumers in the state be sent only to people who specifically request the information.

Another bill to be debated in the Senate, S. 1753 (Shelby/Sarbanes) will nullify California’s recently-enacted landmark financial privacy law. The bill will also pre-empt all future state legislation allowing consumers to say no to the sharing or selling of their private financial information among affiliate companies. Under California’s new privacy law, financial institutions must ask permission before selling a consumer’s private information to other companies and cannot share private information among many of their affiliates against a consumer’s will. Federal law allows for widespread sharing of information among thousands of corporate affiliates even when a consumer says no, putting individuals’ private information at great risk. Under the pending legislation, federal law would override stronger state protections.

California Senators Feinstein and Boxer will propose a floor amendment to legislation reauthorizing the Fair Credit Reporting Act (FCRA) that preserves state privacy protections.

S.1753, scheduled to be to debated today, may be put off until next week so that California legislators may return to California to address issues related to the state’s battle with forest fires.

“Privacy is the next big campaign issue for the 2004 presidential campaign,” said Jerry Flanagan of FTCR. “President Bush‘s support of preemption of stronger state privacy laws is a clear violation of promises he made while campaigning for the Presidency. FTCR will hold Bush to his promises.”

During the 2000 presidential campaign, Bush said he wanted to make it a criminal offense to sell a person’s Social Security number without his or her permission [Associated Press, October 29, 2000, Q&A: Gore and Bush on Education, Trade and Other Issues]. Bush also said: “I think there ought to be laws that say a company cannot use my information without my permission. We can live in a private world” [ZDNN Q&A with George W. Bush, ZDNet News, Jun. 21, 2000]. Similarly, the president said “I believe privacy is a fundamental right, and that every American should have absolute control over his or her personal information.” [Candidates on the issues: Internet Privacy, San Francisco Chronicle, Oct. 6, 2001].

Since the 2002 election cycle, big banks contributed $20.6 million dollars to Congressional representatives — 63% to Republicans. Since 2000, President Bush has received $2.1 million from securities and investment firms, $582,250 from commercial banks, $562,292 from insurance companies and another $967,100 from other finance companies.

The reckless exchange of Social Security numbers and other private information among America’s corporations has dramatically increased Americans’ risk of identity theft. Identity theft led all complaints to the Federal Trade Commission in 2000, 2001, and 2002 and doubled in 2002. Recently the FTC announced almost 10 million Americans are victimized by identity theft each year.

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FTCR is a non-profit and non-partisan consumer advocacy organization. For more information visit us on the web at or

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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