Noticed Notices

By Chris Hoofnagle

Posted on February 23, 2010

Andrew Martin and Ron Lieber report in today's Times on the notice that Chase Bank is using to encourage their customers to opt-in to overdraft fees:

Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you,” the message, emblazoned in large red type, warns. “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency,” with “even in an emergency” underlined for emphasis.
Chase provides an excellent example of how compelling businesses can make consumer notices when they have strong incentives to inform consumers and obtain their consent. This stands in stark opposition to the privacy notices that we are all too familiar with.  Take Chase's privacy policy, for instance, which seems to give individuals options to limit information sharing, but issues a chorus of qualifications beginning with, "Even if you do tell us not to share..."  This tells the consumer: don't bother opting out, because we'll share it anyway!

The risk that Chase and other banks create with these clear disclosures is that regulators could hold them out as exemplars in a different context.  Just imagine how Chase's language could be borrowed for an effective privacy notice:

We will sell personal and other information about you to telemarketers and other non-financial companies, unless we hear from you.  If you do not contact us, we will transfer your credit history among our hundreds or even thousands of affiliates.