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Revised Gramm-Leach Privacy Act notice takes effect Dec. 31

November 1, 2010

Dealers have 60 days to ensure safe harbor protection under federal privacy law, which requires dealers to notify consumers about their information-sharing practices and to inform them of their opt-out rights. The FTC and the federal banking agencies produced a new Model Privacy Notice form that makes it easier for consumers to understand how dealers and other financial institutions collect and share consumer information.

Dealers are not required to use the new Model Privacy Notice; it’s purely voluntary. But the Model Notice form is the only notice format that will afford dealers safe harbor protection beginning Dec. 31.

There are three Model Privacy Notice forms. The first does not provide an opt-out. The second provides an opt-out by telephone and Internet, and the third provides an opt-out with a mail-in form.

Each Model Privacy Notice form consists of two pages and may be printed either on two separate sheets of paper or on both sides of a single sheet. The notice may extend to a third page if there is a long list of affiliates or additional information that must be disclosed and which exceeds the space available on Page 2.

There are five parts to the first page: (i) The title, (ii) an introductory section called the "key frame," which provides context, (iii) a disclosure table that describes the types of sharing used by dealers, which types of sharing the dealer actually does, and whether the consumer can limit or opt-out of any of the dealer’s sharing, (iv) a box titled "To limit our sharing" (if the dealer offers an opt-out), and (v) the dealer’s customer service contact information. The dealer will also identify on the first page, the last date the notice was revised. If an opt-out is offered, the opt-out form is included on the first page.

Page 2 consists of: (i) A heading, (ii) certain frequently asked questions (‘‘Who are we?’’ and ‘‘What do we do?’’), (iii) key definitions, and (iv) a section entitled "Other Important Information,’’ where required state disclosures or an optional acknowledgment of receipt form can be provided.

The Model Privacy Notice must be printed in an easily readable type font and, except where specifically provided, must be in at least 10-point type. Dealers may include their logo on any of the pages so long as it does not interfere with the readability of the notice or the space constraints of each page.

 

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