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Home > Privacy and Business > Financial Privacy > The Value of Free-Flowing Financial Information > Preventing Fraud

Preventing Fraud

Contrary to what many people assume, sharing of financial information allows companies to prevent fraud. It does not substantially increase frauds like identity fraud, one of the most prominent reasons put forward for regulating financial information. Companies prevent and contain identity fraud by sharing consumer information with each other, with third parties, and with affiliates.

If not carefully tailored, "opt-out" requirements in the financial services area may make identity fraud harder to detect, allowing criminals to impose even more costs on both consumers and business. Though financial services companies should offer consumers the option of opting out of all information sharing, consumers should be willing to pay more if their privacy preferences place the companies they deal with at greater risk of being defrauded.


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[updated 01/29/01]

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