By Ylan Q. Mui
Washington Post Staff Writer
First they showed up in your e-mail. Then they found their way onto Facebook. Now ads are coming to your checking account.
As banks test new ways to make money and attract customers, they are tucking ads onto the list of recent purchases on consumers' online bank statements. The charge for your breakfast at McDonald's, for example, might be followed with an offer for 10 percent cash back on your next meal at the Golden Arches. There's no need to print a coupon - just click the link, and the chain will recognize your debit card the next time it is swiped.
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"It's definitely troubling," said Justin Brookman, head of consumer privacy for the Center for Democracy & Technology. "Most people don't notice them, understand them or opt out from them."
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But trust can cut both ways. As the amount of personal data online grows, businesses have had to walk a fine line between using the information for profit and creeping customers out. Facebook learned that lesson several years ago when it was forced to back away from efforts to publish users' browsing habits on public news feeds. And it has been repeatedly criticized for not limiting advertisers' access to users' information, sparking a short-lived but vocal movement to quit the social-networking site.
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Banks see the ads as a potential substitute for popular rewards programs that they say have become unaffordable because of tighter regulations in the wake of the financial crisis. The new rules sharply reduced the amount of money banks receive from merchants each time a debit card is swiped - a fee that was used to pay for customer perks such as airline miles or discounted merchandise. J.P. Morgan Chase, for instance, announced it will discontinue debit card rewards programs for new customers starting next month.
moreThe article mentions this:
Kerry Proposes Legislation to Protect Online PrivacyWASHINGTON, D.C. – Senator John Kerry (D-Mass.) today released the following statement in response to the Federal Trade Commission’s report on consumer online privacy.
“The Federal Trade Commission’s report should be a wakeup call for every Internet user in this country. The report confirms that many companies – both online and offline – don’t do enough to protect consumer privacy. Today’s technology makes it easy for companies to obtain, collect, store, and transfer unprecedented amounts of information, but industry self regulation has proven inadequate to protect consumers. The report presents a thoughtful prescription for common practices that all firms should adopt and provides an important confirmation of the conclusions I’ve reached over the past few months while drafting privacy legislation.
“During the process of drafting legislation, I’ve concluded that consumers should have three nonnegotiable rights. First, all firms must put procedures in place to secure personally identifiable information. Second, consumers have a right to know in clear and concise terms what firms intend to collect, why, and how it will be used. Third, consumers should be given a simple mechanism for opting out of the process.
“Information collection is now a routine part of commerce, but proper stewardship of information is as important as how it is collected. Firms should have to notify consumers when privacy policies change and allow consumers to have their information anonymized if the company goes bankrupt or they want to terminate the relationship. Companies should make an effort to minimize the data collected, ensure it is protected while being transferred, and ensure continued accuracy of information throughout the process.
"The report also makes clear that properly protected information and respect for consumer trust can be good for both business and consumers. In that spirit, I propose that we allow for FTC approved safe harbor programs in which organizations and groups can establish procedures to enact the requirements that I’ve laid out and the report outlines. And while all firms should execute all of the principles, we can take a hybrid approach to enforcement where the most critical rights are protected through rulemaking while others may be subject to a complaint and adjudication process. Those actors participating in safe harbor programs would be subject to FTC oversight and penalties, but because of their voluntary participation and commitment to high standards, they would be free from a private right of action and the complaint and adjudication process.”
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