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STATEMENT-STUFFER USERS should check which flag their prospects salute: If it has a maple leaf on it, those inserts could mean trouble.

In Canada, even inserts are considered invasions of privacy if personal information provided for non-marketing purposes was used to get them into consumers' hands.

That became clear in July when Canada's privacy commissioner Jennifer Stoddart ruled that a bank sent inserts using data provided to administer accounts. Stoddart recommended that the bank allow customers to opt out of receiving statement stuffers.

And now observers are wondering if that requirement will trickle down to the United States. It well could, since U.S. legislators are moving to curtail data use without understanding the impact of what they're doing, according to Marty Abrams, executive director of the Hunton & Williams Center for Information Policy in Atlanta.

That was just one of the threats covered in a September Webinar titled “Living Inside the Law: A Regulatory Update for Financial Services Marketers,” sponsored by Direct magazine and Experian.

Another was the open-access requirements being called for by some congressmen. They could destroy the viability of data repositories, said Tony Hadley, vice president of government affairs at Experian.

The reason? The “credit-clinic effect,” in which a third of all calls received by credit bureaus are from individuals attempting to remove accurate but derogatory information.

There also is confusion regarding what constitutes a data repository.

“The trend in congressional and state laws is that any entity of any size that holds financial information would have to put data security [in place],” Hadley said.

Yet another issue is the intensity of the attacks coming from so many fronts. “Users of [data products] and compilers have not done a good job of bringing value and consumer benefits derived from the flow of data to regulators' attention,” said Hadley.

And financial services marketers have not done a good job of informing consumers — at least according to the listeners. When asked if they thought the terms of opt-out notices for pre-approved credit offers were more conspicuous, 31% said they were not.

Abrams observed that the notices have to be fairly prominent.

Meanwhile, DMers have been rattled by the recent data breaches involving ChoicePoint and LexisNexis. In a listener poll conducted during the Webinar, more than 66% said that media focus on the breaches caused them to devote more resources to securing sensitive information. But that wasn't enough for Abrams.

“I think the number should have been 85%,” he said. “The costs related to data breaches are so high. The risk of a bank regulator or the FTC coming in is great, and reputational risk is higher.”

The news isn't completely bad: Under chairman Deborah Platt Majoras, the Federal Trade Commission has said that firms need not notify customers about data breaches unless there is a very real possibility of harm to them.

This restraint cuts down the likelihood that consumers will receive a flood of notices and begin to tune them out instead of taking action.

In addition, the FTC is creating a division that will focus on privacy and identity protection. The unit will be run by Joel Winston, the associate director of the FTC's Division of Financial Practices.

But back to the international scene. The speakers noted that the European Union and the Asia-Pacific Economic Cooperation are setting more stringent standards than the United States. One is the EU's designation of e-mail addresses and business contact information as personal data covered under the EU's privacy directive.

The recorded Webinar can be heard at www.directmag.com.