Release Date: October 4, 2001
Privacy Agenda of Chairman Timothy J. Muris October 4, 2001
The Federal Trade Commission, the nation's consumer protection champion, plays a vital role in protecting consumers' privacy. The agency's pro-privacy agenda emphasizes both enforcement and education. Initiatives include:
- Creating a National Do-Not-Call List
Consumers who do not want telemarketers to call them have only two ways to stop the calls: they can rely on a voluntary system administered by the Direct Marketing Association, or they can notify each company separately. To give consumers a more efficient way to prevent unwanted calls, FTC Chairman Muris will propose amending the Telemarketing Sales Rule to create a national do-not-call list that would be binding on all telemarketers.* Consumers would be able to make one call to remove their name from telemarketing lists. The Chairman also will recommend exploring additional options to enable consumers to choose to receive calls during certain hours.
- Beefing Up Enforcement Against Spam
Fraudulent and deceptive spam promoting chain letters, pyramid schemes or other kinds of "get-rich-quick" schemes imposes tremendous burdens on consumers and the Web. The FTC will increase its enforcement activities against these scams.
- Helping Victims of ID Theft
Identity theft can ruin a consumer's credit record and make it difficult, if not impossible, for the victim to get a loan, rent an apartment or even get a job. Since 1998, when Congress identified the FTC as the nation's central repository for identity theft complaints, the agency has heard from more than 100,000 consumers who complained about identity theft and asked for information on how to deal with it. The FTC will use the data it collects from consumers to spot patterns that can help law enforcement agencies prosecute perpetrators and help businesses avoid the financial consequences of identity theft. To further help consumers deal with the crime, the FTC will release a universal fraud affidavit that victims of ID theft can submit wherever a fraudulent account has been opened in their name.
- Putting a Stop to Pretexting
"Pretexting" is the practice of fraudulently obtaining personal financial information, like account numbers and balances, often by calling banks under the pretext of being a customer. Prohibited by the Gramm-Leach-Bliley Act, pretexting is exactly the kind of abusive practice that causes consumers to worry about the security of their personal financial information. The FTC has obtained injunctions against information brokers in three cities, and will continue aggressive enforcement efforts.
- Encouraging Accuracy in Credit Reporting and Compliance with the Fair Credit Reporting Act
The credit reporting system provides enormous benefits for consumers, giving them quick and convenient access to credit and other financial services. But consumers can be wrongly denied credit, insurance, even a job, if the information in a credit report is inaccurate. The FTC will step up its efforts to ensure that consumers are notified when information in a credit report is the reason for a denial of credit, insurance or employment, and to ensure that all participants in the credit reporting system meet their obligations regarding the accuracy of a consumer's credit information.
- Enforcing Privacy Promises
It's important that all companies, online and off, honor the privacy promises they make to consumers. The FTC has encouraged web sites to post privacy notices and honor the promises in them. Many web sites - indeed, almost all the top100 sites - now post their privacy policies. The FTC already has brought a number of cases under Section 5 of the FTC Act to enforce the promises in privacy statements. New efforts will focus on cases involving sensitive information, transfers of information as part of a bankruptcy or reorganization, and the failure of companies to meet commitments made under the European Union Safe Harbor program to provide privacy protections. The FTC also will investigate claims touting the privacy and security features of products and services.
- Increasing Enforcement and Outreach on Children's Online Privacy
The Children's Online Privacy Protection Act of 1998 prevents the collection of personally identifiable information from children without their parent's consent. The FTC will continue its COPPA enforcement efforts, as well its business and consumer education activities.
- Encouraging Consumers' Privacy Complaints
The FTC receives over 10,000 consumer complaints about fraudulent and deceptive business practices each week through its toll-free telephone number (1-877-FTC-HELP) and website (www.ftc.gov). The Commission is developing a substantial consumer awareness campaign to let consumers know that they should report their privacy-related complaints to the FTC, too.
- Enforcing the Telemarketing Sales Rule
The FTC has been working to combat telemarketing fraud since 1996, when the Telemarketing Sales Rule became effective. The Commission will increase enforcement of the privacy provisions of the Telemarketing Sales Rule, especially the provisions about harassing calls and the hours during which calls are allowed, and enhance consumer and business outreach efforts, as well.
- Restricting the Use of Pre-acquired Account Information
Consumers and law enforcers are concerned that some telemarketers may misuse "pre-acquired account information" - that is, lists of names and credit card numbers of potential telemarketing customers. The FTC will increase its efforts to ensure that these lists are not used to bill consumers for goods or services they don't want. FTC Chairman Muris will recommend amendments to the Telemarketing Sales Rule to ensure that sellers who have this sensitive information do not deceive or defraud consumers.*
- Enforcing the Gramm-Leach-Bliley Act (GLBA)
The Gramm-Leach-Bliley Act, signed into law in 1999, requires financial institutions to provide privacy notices to consumers, and allows consumers, with certain exceptions, to choose whether their financial institutions may share their information with third parties. The FTC will undertake enforcement efforts to ensure that financial institutions comply with the law and will implement an outreach program to increase consumer awareness of the notices. The Commission will host an interagency workshop on GLB notices on December 4, 2001, to assess the impact of GLB privacy notices, identify successful privacy notices, discuss strategies for communicating complex information, and encourage industry "best practices" and consumer and business education.
The FTC will continue to explore the privacy implications of new and emerging technologies through workshops, reports and other public meetings. The agency will monitor the progress and development of the Platform for Privacy Preferences, an important technology that will enable consumers to specify their privacy preferences electronically and screen out sites that do not meet them. The FTC also will explore holding a public workshop on security issues and other ways to encourage security for personal information.
*As with any rulemaking, the Commission will carefully consider the record developed during the proceeding before making a final decision on the comments.