Some Privacy Is Better Than None

With all the recent tribulations in the wacky world of California – skyrocketing fuel costs, high unemployment, and the budget crisis from hell – it’s easy to forget some of the trendsetting legislation that has emerged from the Golden State. After four years of attempting to get a wide-ranging consumer privacy bill passed, the legislature in Sacramento rose to the fore a few years ago.

The conflict hinged on so-called "opt-in" and "opt-out" issues. Most consumers have received notices from financial institutions with which we do business, giving us the option to opt out of permitting these businesses to share our personal information. These options are required by the federal Fair Credit Reporting Act (FCRA). 

In essence, FCRA provisions permit customers to opt out of allowing their banks, insurance companies, credit card issuers, mortgage lenders and the like to notify the respective companies that their customers don’t want their information shared with other companies. The idea behind the legislation is that our private information is among our most precious possessions. When it proliferates, our liabilities increase.

Recent statistics indicate that more than one out of every ten Americans have been the victims of identity theft. It is now the most common form of felony theft in America. When our Social Security, driver license and credit card numbers, along with our birth dates, spread from data base to data base, we open ourselves to unwanted solicitations from businesses and unfettered access from all types of nefarious individuals.

The problem with the FCRA is that, while it requires businesses to send their customers notices of their right to privacy along with opt-out forms, it requires each individual to opt out of information sharing. In other words, it requires the individual to take action. What members of the California legislature – led by Senator Jackie Speier – attempted with the California privacy legislation, was to shut down unrestricted information sharing by forbidding it outright. In other words, businesses would have to get specific permission from consumers in order to share credit information.

Financial institutions in California, just as in Washington, hold considerable sway (read, "money talks when it comes to lawmaking"). For four years big business was able to stymie any efforts to get real reform passed. But once it looked as though a referendum threatened for March of 2004 would lead to the toughest privacy legislation in the history of the universe, things began to change. The proposed California initiative would make financial institutions wish they didn’t have to get out of their greenback-stuffed mattresses in the morning. Suddenly the financial guys decided to reach a compromise in Sacramento.

Under the terms of the legislation businesses may share credit information with their affiliated companies that do the same type of business (e.g. an auto insurance company can share info with its home insurance business) without requesting their customers to opt-in. In order for businesses to share information with affiliated, but unlike, organizations they must send their customers a simple opt-out form with a prepaid return envelope. To share data with an outside company, they must request their customers to opt-in. The latter means non-sharing is the default status.

The Con$umer Guy’s tip:


There’s very little consumers gain from being barraged with mail and phone calls. There’s even less we gain from having our personal information accessed by who-knows-whom. Opt out whenever you can unless there’s a particular company from whose affiliates you really want to hear. Guard your personal information. Tell your legislative representatives –both state and federal – that you want your personal information protected. You don’t want unknown employees at businesses that have your credit information sharing those data with other parties unknown. Never share your social security number, driver license number or date of birth unless you absolutely must. Just because an application or information form requests particular information, doesn’t mean you must provide it.


Ellis Levinson has made a career of helping consumers with their complaints against businesses that don't meet customers' expectations. Your business might be employing money-saving strategies in the short run
while alienating customers day after day.

Why do You Think They’re Called “Contractors”? It’s Because of that Contract.

The thought of finding a reputable contractor can strike fear even into the heart of a Green Beret. In the last edition of Inside South Valley, I discussed the ways to choose a contractor for your remodeling job. But even tougher can be negotiating the contract. Why bother nitpicking the details of a contract? You went through the trouble of finding a reputable professional, so why not trust him to do the job right? Right?

Wrong. Have you ever heard the expression, “There’s many a slip twixt the cup and the lip”? That means what the parties agree upon and what they remember agreeing upon can be quite different. And if there’s a dispute, you’ll need a written document. My friends Rance and Mara hired a contractor to do a second story addition on their house. The document was about two pages long, probably one-tenth of what it should have been. Their descent into contracting hell was rapid and deep.

So what goes into a contract? Everything! And I do mean everything, down to the color and brand of the paint and the appliance model numbers. Never be afraid to negotiate the fine points of the contract. Don’t let a preprinted form intimidate you. Other than for legal requirements, everything in a contract is negotiable.

Make an extensive list of everything you’ll want in the contract. While you and the contractor write the document, include any changes. It’s easier to do at this stage so you won’t have to create change orders later on. Provide for negotiating such change orders as the work progresses.

For substantial renovations, have the contractor include sketches or building plans. Mara and Rance didn’t. If the contractor doesn’t have a design department, consider hiring an architect. If you take that option, interview several architect candidates, as you would when hiring a contractor. Be sure all your needs appear in the remodeler’s contract, as some incidentals may not appear in the architect’s plan.

You can negotiate for upgrades or a price reduction before you sign. But don’t get pushy. And get a warranty – at least one year, preferably backed by a reputable warranty company – on all work and materials.

Include a completion date with daily monetary penalties for late completion.

Anytime you pay for materials or services provided by a subcontractor – plumbers or electricians for example – have the contractor give you a lien release signed by the supplier or “sub”. If you don’t, your house could be subject to mechanics liens if the contractor doesn’t pay these providers.

Include wording that describes how clean the job site will be left at the end of each day and how waste will be disposed of.

Set up the payment schedule based on phases of completion, not upon dates. In other words, when specific parts of the job are completed – say the staircase is finished – the contractor will be paid for that stage of the job (once government inspectors sign off on the work). And be sure there’s a holdback included on the final payment of at least ten percent. Final payment should take place 30 days after completion in order to ensure that all work is done properly and everyone’s been paid.

Include a provision for settling disputes, whether through arbitration or court proceedings. Arbitration means you will not be allowed to sue the contractor.

Purchasing appliances and fixtures on your own might save money or offer more options.

Include a clause entitling you to inspect and supervise the job as work progresses.

Try not to pay any sums in advance. California limits deposits to ten percent of the contract or $1,000, whichever is less. If you have to pay for materials in advance of the job start, you may want to make the checks out to the materials suppliers. Include that in the document.

Rance and Mara did very few of these things. They paid for incomplete work and eventually asked me to rescue them from an overpriced and drastically incomplete job. It cost them a lot of extra money and emotional stress – to say nothing of the additional six months – to get the job finished.

If you’re lazy about putting in your share of the work at the start, you may end up putting in a lot more effort trying to make everything right later on. Good luck.

Ellis Levinson has made a career of helping consumers with their complaints against businesses that don't meet customers' expectations. Your business might be employing money-saving strategies in the short run while alienating customers day after day.

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