Pepsi Cola

Information Technology Paper

BIS / 220

December 6, 2011

Dr. Hee Lee

Information Technology Paper

In 1977, both the Privacy Protection Study Commission and the National Commission

on Electronic Funds Transfer (NCEFT) recognized that privacy concerns could be especially strong in relation to EFT. NCEFT devoted 19 recommendations to means of protecting privacy. Electronic Funds Transfer Act Law passed in 1978 because of the growth of electronic ATM machines and electronic banking. The use of paper checks has steadily declined since then, but the check served as hard evidence of payment. The explosion of electronic financial transactions created a need for new rules that would give consumers the same level of confidence that they had in the checking system. This includes the ability to challenge errors and correct them within a 60-day window, and to limit liability on a lost card to $50 if the card reported as lost within two business days. The principal ethical issues and concerns were the extent to which personal data in EFT systems be disclosed to third parties by financial institutions. The possibility of Government or private surveillance through EFT systems and data files; and the right of consumers to see, challenge, and correct personal data in EFT systems that might be used, for example, to refuse them credit or in other disadvantageous ways. If EFT services become more pervasive, integrated customer files will be more common and public consciousness of the potential for invasion of privacy is likely to increase.

With increased use of EFT, there will be a large number of points at which traditional

norms of privacy are susceptible of invasion. More EFT terminals will be online, making

electronic surveillance a more credible possibility. Single-statement reporting of all kinds of

financial transactions will become common; more data will be aggregated and thus easier

to access. The use of EFT systems for surveillance...