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FOR IMMEDIATE RELEASE
December 31, 2002
Agreement with Bank One Safeguards Consumer Financial Information


OLYMPIA-12.31.02- An agreement announced today will require a major U.S. bank to more carefully control how telemarketers and other businesses use personal information obtained from the bank about its customers, Attorney General Christine Gregoire said.

The agreement between the states and Bank One Delaware N.A.-formerly known as First USA-sets conditions under which the bank will share customer information with telemarketers.

The agreement is the latest in a series of efforts by state attorneys general to limit how telemarketers and other direct-sales firms use credit card numbers and other personal information obtained from financial institutions. Washington, 27 other states and Puerto Rico signed the agreement with Bank One.

Attorneys general reached a similar agreement with Citibank last February. The states, which began looking into information-sharing by banks three years ago, focused on Citibank and Bank One because they are among the largest participants in marketing programs aimed at their customers.

"Financial institutions are careful to protect their customers' hard cash, but the same hasn't always been true when it comes to another valuable item-customer information," Gregoire said. "With this agreement, Bank One will become a leader in helping to ensure that personal information about bank customers is protected from improper use."

Among other things, the practice of sharing bank-customer information with telemarketers and other businesses has resulted in unauthorized purchases charged to customer credit cards. Consumers often did not know telemarketers had their financial information.

The agreement with Bank One spells out conditions the bank will impose on businesses with whom it shares customer information. Some of those conditions require:

  • Bank review and approval of all marketing materials used by marketers it shares information with;
  • Compliance with all consumer protection laws by telemarketers;
  • Clear consumer approval of any charge to be placed on the consumer's credit card. A record of that consent must be kept for at least 24 months and must be in writing if the purchase was authorized by mail, on audiotape if authorized by phone, and by e-mail if authorized online.
  • No solicitation or other marketing material or script shall be deceptive.
  • The terms of any trial offer, including its duration and how to cancel, must be clearly and conspicuously disclosed.

The agreement also bans deceptive marketing and, if telemarketers mention the bank during a sales call, they must clearly state they are not affiliated with the bank.

The Bank One agreement is the latest in a series involving Washington and other states that are intended to curb the improper use of personal financial information.

In addition to the Citibank settlement, the state settled a case in August 2000 with the Connecticut-based telemarketing firm BrandDirect, which had obtained consumer information from several major financial institutions. Consumers complained that unauthorized purchases were sometimes billed to their credit cards.

In September 2000, Washington joined other states in settling a lawsuit against US Bank over the bank's sharing of credit-card information with marketers.

Under terms of the Bank One agreement, the financial institution will pay a total of $1.3 million to the states to cover their legal costs. The five lead states in the case each will receive $135,000. The remainder will be split among the remaining states and Puerto Rico, with $25,000 going to Washington.

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