Consumer Privacy Act
Title 15 Section 94 of the Federal Trade Commission (FTC) Act requires financial institutions to take measures to protect consumer information. These businesses bear liability if they fail to protect their clients' privacy from any undisclosed third party.
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Protection
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Per the FTC Act, financial institutions must protect their customers' data. Protection involves establishing security and password systems and maintaining confidentiality policies within their organizations.
Disclosure
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Financial institutions must present customers with a privacy policy that explains how they protect their customers' information and who has access to that data. All such policies must have an opt-out rider that lets customers prevent the business from sharing personal data with a third party.
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Exceptions
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The act allows for exceptions to privacy requirements when a financial institution clearly notifies customers up front that they intend to share data with another business so long as the customer has the opportunity to opt out. Institutions may also share private customer data without customer notification if the information helps a third party perform services for that institution.
Enforcement
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The FTC enforces the FTC Act and takes companies that violate the terms of the act to court.
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References
Resources
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