Bank of America Corp., which includes NationsBank Corp., said yesterday it was taking new steps to protect customer information by refusing to share it with outsider marketers.
The move came as banks face new scrutiny from federal and local regulators and lawmakers for providing customer information with outside vendors and telemarketers.
"We've gone further than any other bank in covering customer privacy," bank spokesman Dennis Wyss said. "Customers who may previously be concerned about privacy no longer have to worry about information given to telemarketers."
In the past Bank of America has sold and released private information about its customers to third-party marketing companies, but Wyss said the bank has offered customers a variety of ways to "opt out" of such marketing solicitations.
But consumer advocates and privacy experts suggest the bank was also influenced by an announcement this week by the California state attorney's office that it would launch an investigation of the privacy practices of the region's banks. Bank of America, which was headquartered in San Francisco before its merger with Charlotte-based NationsBank, has many bank branches in California.
State regulators in Minnesota this week sued Minneapolis-based U.S. Bancorp for allegedly sharing customer information with outside vendors and telemarketers, which they say violates state and federal consumer protection laws.
"Fundamentally the issue is that consumers should control their financial information, with whom and how it is sold. This still does not give the consumer the power," said Mary Griffin, counsel for Consumers Union. "They say they're not going to sell to third-party marketers, but they will sell to third-party marketers who don't sell to you. Who knows what they'll do with the information?"
Bank of America officials said they were trying to protect customers primarily against telemarketers; third-party companies that don't sell to bank customers generally were not telemarketers, but assemble information databases.
Wyss said the bank has worked closely with the Office of Comptroller of the Currency, a federal banking regulator, in crafting the policy. It has been "on the front burner for a couple of weeks," he said. "In the past couple of days the issues surrounding it have heightened."