Can a credit card issuer share my Social Security number?

June 7, 2013 00:12 by Consumer Ed

Dear Consumer Ed: 

I have a department store credit card issued through a retail bank. I recently received a privacy policy form in the mail.  Part of the policy states that the types of personal information they collect and share depend on the product or service I have with them, but the information collected and shared can include:

•    Social Security number and income

•    Account balances and payment history

•    Credit history and credit scores

They said you could phone and limit sharing – which I did immediately – but it may take up to 30 days from the date the notice was sent.  My question is this:  Do the department store/retail bank have the right to share my Social Security number with other people?  This seems like a huge security risk and invasion of my privacy.

Consumer Ed says: 

Although we have not disclosed the name of the particular department store or retail bank in this column, based on the information that you have provided to us it appears that the department store’s credit card is operated by the retail bank in question, so it is probably the bank’s privacy policy that you received in the mail.  The reason this matters is because the bank meets the definition of a “financial institution” under federal law.  As such, it is allowed to share your nonpublic personal information, e.g. your Social Security number, provided that it follows certain regulations required by the Federal Trade Commission (“FTC”).  Specifically, the bank can disclose nonpublic personal information about you to a nonaffiliated third party if it has done all of the following:

•    provided you initial notice;
•    sent you an opt-out notice;
•    given you a reasonable opportunity, before it disclosed the information to the nonaffiliated third party, to opt out of the disclosure; and
•    you do not opt out.

Additionally, any entity (whether it is a financial institution or not) that receives your personal information from the bank may be restricted in its reuse and re-disclosure of your personal information.  

Based on your question, it sounds like you’re also concerned about the security risks involved with the sharing of personal information.  You should know that the FTC has established a regulation requiring financial institutions to “develop, implement, and maintain a comprehensive information security program” in order to “insure the security and confidentiality of customer information.”  You can learn more by visiting the FTC’s webpage about the Gramm-Leach-Bliley Act at www.ftc.gov/privacy/glbact/glboutline.htm.  If you have any additional concerns and need legal advice, you should consult a lawyer.

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Credit Card Surcharges

May 28, 2013 17:36 by Consumer Ed

Dear Consumer Ed:

How much of a surcharge are merchants allowed to charge you for paying with a credit card?

ConsumerEd says:

Surcharges for credit card payments became legal in January of 2013 following a class-action settlement between merchants, Visa, MasterCard, and a number of major banks.  Now, merchants may charge from 2-4% (but not more) of the underlying credit card purchase if you make your purchase using either a Visa or MasterCard credit card.  This surcharge is meant to cover the cost that merchants pay to the credit card companies in order to have the ability to process payments made with those credit cards.

However, merchants who add this fee onto their customers’ bills must post a sign in their front window notifying them of this.  Additionally, the merchants must disclose the exact amount of the surcharge at the point of sale and on their receipts.  A caution:  For online purchases, merchants are only required to disclose this surcharge on the first page where the potential customer is prompted to enter in his/her credit card information.

These surcharges may only be imposed on Visa and MasterCard purchases; such fees may not (at least not yet) be assessed for an American Express or Discover Card purchase.  Finally, a merchant can never impose a surcharge for a purchase made on a debit card.

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Can a collection agency add fees on to a debt?

March 7, 2013 22:55 by Consumer Ed

Dear Consumer Ed:

I'm in grad school and had some medical care that I was told was covered by my insurance. The insurance company wouldn't pay and now the doctors say that it's been turned over to a collection agency and there's an additional 38% fee. That's another $400. Is that legal?      

Consumer Ed says: 

If a bill goes unpaid, it is common for the original party to sell the debt to a third-party collection agency after a reasonable period of time.  Your doctors are legally permitted to turn over your debt to a collection agency without giving you any notice.  Turning debts over to collection agencies enables the original party to focus on their business instead of chasing their delinquent clients or customers. 

What might be illegal is the 38% fee that the agency added onto your debt.  Debt collectors can add reasonable charges to your debt, but only if you agreed to pay collection costs in your original contract with your doctors.  To determine whether these fees are reasonable, you will need to know why you are being charged the additional 38% fee.  You are entitled to an explanation of this fee from the collection agency.  Some examples of reasonable charges are for attorney fees, court costs and legal fees as allowed by state law.

Debt collection is regulated by the Federal Fair Debt Collection Practices Act (FDCPA).  If the collection agency is trying to collect unreasonable fees or fees to which you never agreed, they are in violation of that Act.  In that case, you have the right to sue them through a private attorney in state or federal court within one year from the date of the violation.  If you win, you may recover damages in the amount of any losses you suffered as a result of the violation, plus an additional amount of up to $1,000.00.  You may also be able to recover court costs and attorney fees.  However, please remember, even if the debt collector violates the FDCPA, that does not erase the legitimate debt that you owe.

If the collection agency has violated the FDCPA, you may also file a complaint with the Governor’s Office of Consumer Protection (OCP), provided that the debt collector is not an attorney licensed in this State.  You can contact OCP at www.consumer.ga.gov  or by calling 404-651-8600 or 1-800-869-1123 (toll-free in Georgia, outside of the metro Atlanta calling area).  You should also file a complaint with the FTC.  You can contact the FTC at www.ftc.gov or by calling 877-FTC-HELP.  If the debt collector is an attorney, you should contact the State Bar of Georgia at www.gabar.org or by calling 404-527-8700.

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