WASHINGTON (AP) _ The privacy notices stuffed into envelopes with bank and brokerage-firm statements and credit card bills aren't getting much of a reading from consumers and are too complicated for most to understand, regulators say.
The notices from financial institutions disclosing their privacy policies, required by law, should be simpler, shorter and better designed so that consumers can understand them, said the report issued Friday.
Commissioned by the Federal Reserve and other bank regulatory agencies, the Federal Trade Commission and the Securities and Exchange Commission, the report concluded that consumers are overwhelmed by complex information and that a new form of privacy notice is needed.
Researchers at Kleimann Communication Group, which conducted the study over 12 months, used focus groups of consumers to get their reactions to sample notices. They created privacy notices in tabular formats.
Most consumers don't understand the data-sharing practices of financial institutions and are therefore unable to make informed choices about how they allow their information to be used, the report says.