“any person that receives from [an affiliate]… information that would be a consumer report but for [the statutory exceptions to the definition of a consumer report] may not use the information to make a solicitation for marketing purposes to a consumer about its products or services unless [the consumer is given a notice and opportunity to opt out of receiving solicitations generated in such a manner].”
The federal banking agencies and the Federal Trade Commission (collectively, the agencies) have recently released final rules implementing Section 624 of the federal Fair Credit Reporting Act relating to the ability of one affiliate to use certain information obtained from another affiliate to make solicitations to consumers. Specifically, Section 624 states that :
The statute also provides various exceptions to the requirement.
The rules generally prohibit an entity that receives ‘eligibility information’ (ie, information that would be a consumer report but for the affiliate sharing and experience/transaction information exceptions provided in the statute) from the disclosing affiliate from using such information to make a solicitation for marketing purposes to a consumer about the receiving affiliate’s products and services, unless the consumer receives a notice and an opportunity to opt out of receiving such solicitations.
In general, the rules indicate that a receiving affiliate makes a solicitation for marketing purposes if:
- it receives eligibility information from a disclosing affiliate;
- it uses such information to:
- identify the consumer or type of consumer to receive the solicitation;
- establish criteria used to select the consumer to receive a solicitation; or
- decide which of its products or services to market to the consumer or tailor its solicitation to that consumer; and
- as a result of the receiving affiliate’s use of the information, the consumer is provided with a solicitation.
The rules include several exceptions to the affiliate marketing notice and opt-out requirement. For example, the rules do not apply if a receiving affiliate uses eligibility information :
- to make a solicitation to a consumer with whom the receiving affiliate has a “pre-existing business relationship”;
- to facilitate communications to an individual in connection with certain employee benefit matters;
- to perform services on behalf of another affiliate;
- in response to a communication about the receiving affiliate’s products or services initiated by the consumer; or
- in response to an authorization or request by the consumer to receive solicitations.
In addition, the rules do not apply if the receiving affiliate’s compliance with the rules would prevent it from complying with certain state insurance law requirements.
- there is a financial contract between the entity and the consumer which is in force;
- the consumer has purchased, rented or leased the entity’s goods or services (or there has been a financial transaction between the consumer and the entity) during the 18-month period prior to the date a solicitation is sent; or
- the consumer made an inquiry or application regarding a product or service offered by the entity during the three-month period prior to the date on which a solicitation is sent.
However, the rules state that if the entity affords the consumer a broader right to opt out of receiving solicitations than is required by the rules, the requirements of the rules may be satisfied by providing the consumer with a clear, conspicuous and concise notice that accurately discloses those opt-out rights.
Reasonable Opportunity to Opt Out
he rules require that the consumer have a “reasonable opportunity” to opt out before a receiving affiliate uses eligibility information to make a solicitation to the consumer.
The rules also require that the consumer have a “reasonable and simple” method to opt out. The methods are similar to those provided in the GLBA privacy rules, such as by designating a tick box or providing a toll-free telephone number. However, unlike the GLBA privacy rules, the example in the rules relating to use of a reply form indicates that the form should be accompanied by a self-addressed envelope.