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Reduced Junk Mail
One of the great and unfortunate myths of the privacy debate is that information
sharing, among all companies including those in financial services, leads to increased
junk mail. In fact, information sharing reduces junk mail.
Companies that are unaware of the needs and wants of consumers send large amounts
of postal mail trying to reach interested consumers. The companies that have an idea
of what consumers want reduce the amount of mail they send, addressing it only to people
who may be interested in their offerings. This reduces annoyance to the public, and it
reduces waste. In a study for the Financial Services
Roundtable (FSR), Ernst & Young found that FSR members save $1 billion per year through
targeted marketing based on shared information. Depending on how competitive the markets
are, much of these savings may be passed on to consumers.
Junk mail, of course, is more a matter of convenience than privacy. Reduction
of junk mail, however, is one of the benefits of free-flowing information in the
financial services sector, and elsewhere. If information sharing is prevented in the
name of privacy, one cost may be an increase in the inconvenience of junk mail.
Benefits from Current Information Sharing by Financial Services Companies,
Ernst & Young (December, 2000)
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