ARIZONA STATE SENATE
Phoenix, Arizona
release of
information; written authorization
Purpose
Prohibits the sale or release of customer information for commercial purposes unless prior written authorization is given.
Background
Within many different industries and state entities, the purchase of customer information from third party businesses is a common practice for the conduct of business, marketing or other purposes. Though a number of businesses give their customers the ability to stop the sale of their private information, the practice is yet to be uniformly regulated by any state.
The Financial Modernization Act of 1999, also known as Gramm-Leach-Bliley, requires financial institutions to inform customers of policies regarding the collection and sharing of nonpublic personal financial information in addition to giving customers the ability to “opt-out” of the financial institutions sharing of customer information with unaffiliated third parties. Though it deals specifically with financial institutions, the federal law has become the model for proposed broader privacy protection legislation on the state level. The “opt-out” policy codified by Gramm-Leach-Bliley is commonly used by other types of businesses as well. Recently, Qwest Communications gave its customers the ability to remove their personal information from customer information lists prior to sharing that consumer information with its subsidiaries and outside companies.
Unlike Gramm-Leach-Bliley and the recent events relating to Qwest, which rely on customers removing their personal information from a preconceived list, S.B. 1258 prohibits all persons, businesses, this state and its political subdivisions from selling or releasing customer information for commercial purposes without prior written authorization from the customer.
The fiscal impact is unknown.
Provisions
1. Prohibits a person or business entity from releasing or selling for commercial purposes any information about the customer unless the customer gives prior written consent.
2. Prohibits this state or a political subdivision of this state from releasing or selling for commercial purposes information about a person or business entity unless the person or business entity gives prior written consent.
3. Provides for a general effective date.
Prepared by Senate Staff
February 8, 2002