Question 14.10: How can financial-service customers limit the sharing of the...

Financial-services firms must inform customers of their policy regarding the sharing of information with other parties. Financial-services firms must also inform customers about how the customer can opt out of having their information shared with other parties. Generally, the customer must inform the company within 30 days of being notified that they do not want their information shared. There is some information that customers cannot protect from being shared.

This information can be extremely useful to financial institutions because they can use the information to offer more than one service to the customer. They have already gathered the relevant information and can target products and services that are particularly a good fit for that customer. This can benefit them by increasing profits and cash flows and can benefit the customer by allowing them to get all of their financial services needs taken care of in one place.

However, there are some real dangers that this information can be misused in some cases. For example, if there is some adverse private information about a particular customer (for example they have a very serious medical condition) that information might be used to deny them several financial services (such as getting a new mortgage). This customer essentially becomes blacklisted by many financial-services companies.