How ‘Bout Some Privacy?

The home phone rings and we all have to calculate whether to answer. It could be the boss or the daughter at college, but it’s probably a telemarketer. Do you feel lucky?

Then the mail comes and most of it could be thrown unopened into the trash. But you do that at your own risk, because one envelope carefully designed to look like junk might be a notice from your bank, your one shot at eliminating some of those annoying phone calls. In intentionally vague language, the notice tells you how to limit a financial institution’s ability to market your private data--and all that you’re required to do is jump through a series of voice mail hoops. Or fill out a form, address your own envelope and put on your own stamp.

What if consumers didn’t have to go through ridiculous contortions to stave off waves of unwanted privacy invasions? A bill by state Sen. Jackie Speier (D-Hillsborough) would be a big step in that direction. Californians should be storming the Legislature to demand its passage, without the watering-down being demanded by Gov. Gray Davis.

Another sorely needed bill--legislatively unrelated to Speier’s--would allow residents to opt out of uninvited telemarketing calls by signing on to a state-maintained list. This measure, by Sen. Liz Figueroa (D-Fremont), is far from perfect because it exempts companies with which you already do business, such as your phone company. But it could be a start toward a time when we might answer the phone without cringing.

The Speier bill, SB 773, would require that banks, lenders and other financial companies prominently notify consumers and ask their permission before sharing family financial data--bank balances, credit balances, home loans--with nonaffiliated companies. It is much stronger and clearer than the wimpy existing federal law that makes consumers do all the work to partly opt out.

Davis, who has received hundreds of thousands of dollars in contributions from the financial services industry, wants maximum fines for violators reduced tenfold, from $250,000 to a paltry $25,000. He wants consumers to have to actively opt out if they want to protect themselves. Another proposal that Davis supports would open a big loophole for companies by allowing them to form temporary “joint marketing agreements” to get around the data sharing ban.

Davis said Wednesday that Speier’s bill, as constituted, could create “massive unemployment or disruption of the economy.” That assertion is as ludicrous as some telemarketers’ spiels.

Anyone who has taken out a second mortgage for a bungalow remodel knows the problem. The loan is followed by a flood of home improvement and consumer loan “offers” transparently based on family financial data. Banks link their sales pitches for retirement accounts and investment products to the size of your income and savings. Online databases have made it even easier to share data. The sense of invasion is profound.

The bill won’t turn off the spigot completely. There are too many sources of financial data, including public records, out there. But this is still a groundbreaking protection, and it needs the support of Davis to pass the Assembly.

The governor should turn a deaf ear to the bankers, insurance companies and others who profit so handsomely from using and selling our private financial data. He has said he supports the Figueroa telemarketing bill, as is. Good. He should also drop his objections to Speier’s measure.