Financial Privacy

Protecting Consumer Privacy

Protecting Consumers’ Financial Privacy

Financial institutions are required to take steps to protect the privacy of consumers’ finances under a federal law called the Financial Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act. The FTC is one of eight federal agencies that enforces provisions of Gramm-Leach Bliley, and the law covers not only banks, but also securities firms, and insurance companies, and companies providing many other types of financial products and services. Under the law, agencies enforce the Financial Privacy Rule, which governs how institutions can collect and disclose of customers' personal financial information; the Safeguards Rule, which requires all financial institutions to maintain safeguards to protect customer information; and another provision designed to prevent individuals and companies from gaining access to consumers’ personal financial information under false pretenses, a practice known as "pretexting."