A Federal Trade Commission member urged the financial services industry to institute privacy protections for consumers of electronic banking.
"Right now you have an opportunity to lead, and I think the window is closing," Commissioner Christine A. Varney said in a speech last week before a conference on the Emerging Law of Cyberbanking and Electronic Commerce.
Ms. Varney cited American Express, Visa, Citicorp, and the former Chemical Bank as institutions that have formulated privacy policies.
"We would like to see these examples spread more broadly in the financial services sector," she said.
Electronic commerce cannot succeed unless reliable safeguards for information privacy and fair information practices are established, Ms. Varney said.
So far, the government has encouraged self-regulation, but she predicted
Congress will grow increasingly impatient over the next four years. Last year, 18 bills on privacy were introduced in Congress, she noted.
Ms. Varney suggested the market should let consumers select their degree of privacy by testing a variety of products. For example, institutions could sell smart cards that produce audit trails and are refundable when lost as well as smart cards that protect anonymity but offer no refund protections.
