Banks Say They Release Customers’ Data

Several of California’s largest banks confirmed Wednesday that they sell or release private information about their customers to third-party marketing companies.

Bank of America, Wells Fargo and Union Bank--which together control about 60% of the California market--each said they have shared personal or financial information about their customers through agreements with outside vendors or telemarketers.

On Wednesday, state regulators in Minnesota sued Minneapolis-based U.S. Bancorp for making a similar deal, which they say violates state and federal consumer protection laws.

In California, the state attorney general’s office said it will review the policies of the state’s banks to ensure no laws are being violated.

“There are clearly some big privacy issues,” said Herschel Elkins, the state’s senior assistant attorney general. “Consumers who deal with banks do not understand that their private information might be shared.” He said that two years ago the state reviewed bank policies on selling or sharing customer data and found no violations.

Union Bank is watching the U.S. Bancorp lawsuit with particular concern because the San Francisco-based bank has contracted with the same telemarketing firm, MemberWorks. Though not a defendant in the Minnesota lawsuit, MemberWorks--which offers health and dental-care discounts--is described in the suit as using deceptive telemarketing scripts and charging some customers for services they did not order.

“This is something we’ll be tracking,” said Joanne Curran, a Union Bank spokeswoman. “We’re hoping this was just an isolated problem.”

Union Bank began sharing information--including customers’ names, ages and account balances--with a unit of MemberWorks about four weeks ago. The bank receives a portion of all revenue collected, Curran said. She said the bank has received no complaints from customers.

Officials at MemberWorks could not be reached for comment on the Union Bank deal.

Bank of America also sells customer information--including Social Security numbers, phone numbers and bank account numbers--to third-party companies seeking to sell products or services, according to B of A spokesman Kerry Walker.

He said the bank provides only “minimal” information needed by vendors to make an offer, but he could not explain why bank account numbers are provided to outsiders.

Wells Fargo Bank issued a terse news release Wednesday confirming that it has shared customer information.

“From time to time, we contract with parties outside our affiliated banks and companies to make available to customers certain services or products,” the statement said. “Use of customer information is limited to making a specific product offer and the outside party cannot use it except for that purpose.”

Wells Fargo officials would not disclose what type of information they disclose or with whom they share it.

None of the banks would say how much they are paid for the customer information.

All three said they allow customers to opt out by requesting that their names and other confidential information be excluded from future marketing offers.

Consumer advocates said banks should be prevented from selling data they collect on their customers.

“Privacy should not be for sale,” said Ed Mierzwinski, consumer program director of the U.S. Public Interest Research Group, a Washington-based consumer group.

In a February survey, the California Bankers Assn. found that 98% of the state’s banks said they had policies against selling customer information to outside parties. Only Bank of America admitted to selling data.

The trade group recommends that banks release information about customers to third parties only after giving customers an opportunity to keep such information private.

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Times staff writer Edmund Sanders can be reached at edmund.sanders@latimes.com.