Learn About the Gramm-Leach-Bliley Act (GLB)
The Financial Modernization Act of 1999 alternatively called the "Gramm-Leach-Bliley Act" GLB Act. The Gramm- Leach- Bliley Act aims at protecting the personal information of the consumers especially their financial records and details of these records that are kept by the financial institutions in the United States. The privacy provision of this act covers three important main parts. The three important parts are the ‘Safeguards Rule’, the ‘Financial Privacy Rule’ and the provisions to prevent “pretexting”.
The ‘Safeguards Rule” and the ‘Financial Privacy Rule” of the Gramm- Leach- Bliley Act is enforced by the various states in the United States along with eight federal agencies that are authorized by the provisions of the GLB Act to administer these regulations. The ‘Safeguard Rule” and the ‘Financial Privacy Rule’ is applicable to the financial institutes. It encompasses insurance firms, security firms, banks, other companies that provide any type of financial products or services to the consumers.
Financial services extends to loans to customers, brokering services offered, lending activities, preparation of individual tax returns, safeguarding or transferring of money, offering services that that include any financial advice, require credit counseling, collection of debts or recovering from the consumers as well as settling services that involve any matters pertaining to companies and firms that deal in residential real estate service, and a host of other such activities.
The activities of these non traditional financial companies are also regulated by the Federal Trade Commission (FTC). For a complete list of the companies, services and activities that are covered and regulated under these two regulations (‘Safeguards Rule’ and the Financial Privacy Rule) you can visit at: http://www.ftc.gov/privacy/privacyinitiatives/financial_rule_lr.html
Financial Privacy Rule
This rule takes care of how the financial institutes collect and disclose details about the personal financial information of their customers. It also covers other companies apart from the traditional financial institutes, which may have access to such information. In addition, under the provision of the GLB Act, financial companies require to provide their customers and consumers privacy notices explaining the practices of information sharing that their company follows, provide a clear information about the difference between a customer and a consumer stating why the differentiation is important in the context of the financial privacy requirement, determine how the non public information can be disseminated, and give the consumers an opportunity to opt out from sharing certain details of their private financial information.
The ‘Safeguards Rule’ makes it mandatory for every financial institution to create, maintain and implement safeguards that can help to protect the privacy of the financial details of their customers. The ‘Safeguards Rule’ is applicable for the traditional financial companies and institutions that collect personal financial information about their customers as well as those institutions such as the agencies that are responsible to report credit details of the customers that they collect from other institutions which offer financial services.
Pretexting is an important provision under the GLB Act that offers protection to the consumers from the companies as well as the individuals that try to get hold of the details of the customer’s personal financial records under false pretexts. The practice of obtaining records under false pretexts is commonly referred to as “pretexting."
The Financial Trade Commission under the provisions of the GLB Act helps to protect the consumers from deceptive, fraudulent and unfair business practices and offers information to the customers to help them to detect, avoid and stop being prey to such practices of the marketplace. If you wish to receive free information pertaining to the consumer issues or wish to file a complaint you can call at: 1-877-FTC- Help or 1-877-382-4357. You can also visit at the following website: http://www.ftc.gov/privacy/privacyinitiatives/glbact.html for additional information on the GLB Act.