The federal government should wait and see whether private industry solutions adequately respond to consumer concerns about privacy and billing dispute resolution issues that arise with the growth of electronic payment systems, and then step in to regulate only if those efforts -- be they market-created responses, voluntary self-regulation or technological fixes, or some combination of these -- are inadequate, according to Federal Trade Commission testimony delivered at a hearing in Washington, D.C. this morning. The government also should work to ensure that consumers get the information they need to make informed choices about protecting the privacy of their financial transactions, the FTC said. The hearing, by the U.S. House Banking Committee’s Subcommittee on Financial Institutions and Consumer Credit, was held to discuss issues associated with using credit cards online, smart cards, debit cards and other electronic payment systems.
“Concerns have been expressed that enhanced protections may inhibit the development of new technologies by adding regulatory compliance costs and limiting flexibility,” said David Medine, Associate Director of Credit Practices at the FTC and who delivered the testimony on behalf of the FTC. “The reverse may be true as well. Insufficient consumer protections may inhibit consumer confidence in new systems and those systems may never reach a critical mass of acceptance.” The Commission’s vote to approve the testimony was 4-0.
Copies of the testimony, as well as transcripts of FTC workshops on privacy issues, are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC Matter No. P954807)