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Saturday, September 23, 2000
Copyright © Las Vegas Review-Journal

U.S. Bancorp reaches settlement in customer information privacy case

By ROB WELLS
BLOOMBERG

WASHINGTON -- U.S. Bancorp, the 10th largest U.S. banking company, settled an investigation with Nevada and 37 other states involving the sale of confidential customer information to a telemarketing firm, officials said Friday.

Bank customers in Nevada weren't among those who were identified to the telemarketing firm, said Ken Ladd, president of the bank in Nevada.

Ladd said U.S. Bank voluntarily stopped the program shortly after Minnesota filed a lawsuit over the practice. Since then, the bank appointed a "privacy czar" who reports directly to the top executive. Ladd serves on the bank's new privacy council.

U.S. Bank is the fourth largest commercial bank in Nevada, he said. The bank has 51 branches in Nevada with 51 branches and $1.3 billion in deposits here, according to the latest information available from the Federal Deposit Insurance Corp.

"This settlement is an important step in helping to better protect the privacy of bank customers," Nevada Attorney General Frankie Sue Del Papa said in a statement. Her office joined a multistate group that intervened in a civil lawsuit filed by Minnesota.

The St. Paul, Minn.-based bank's settlement with the attorneys general of 38 states and the District of Columbia is nearly identical to the agreement U.S. Bancorp reached in June 1999 with the Minnesota attorney general's office.

The Minnesota investigation centered on an arrangement that involved telemarketer Memberworks Inc. paying U.S. Bancorp $4 million plus commissions for financial and personal information on 900,000 customers.

Under the settlement, U.S. Bancorp agreed to stop the practice of sharing customer account information with third parties for the purposes of marketing nonfinancial products and services, the Ohio attorney general said in a statement.

The bank will make refunds to customers in all the states who purchased a product or service but didn't use it.

Review-Journal staff writer John G. Edwards contributed to this report.