What is the affiliate marketing protection under FACTA?

• A. Only sharing anonymized data with affiliates
• B. Prohibition on any data sharing with affiliates
• C. Restrictions on sharing consumer information with affiliates for marketing; consumers must be given an opt-out
• D. Allowing unrestricted sharing of consumer data with affiliates for marketing

Answer: (C)

FACTA’s protection for affiliate marketing limits how a financial institution can share nonpublic personal information with its affiliates for marketing and gives consumers a clear opt-out right. In practice, if a company wants to share customer information with its affiliates for marketing, it must notify the consumer and allow them to opt out; if the consumer chooses to opt out, the sharing for marketing purposes must stop. This isn’t a blanket ban on all sharing, nor does it allow unrestricted sharing, but it does require restrictions and the consumer’s right to opt out.

Sharing only anonymized data would sidestep protections because the rule targets nonpublic personal information, not data that has been anonymized. A total prohibition on sharing would be too strict given that permissible sharing can occur under compliant circumstances, and unrestricted sharing would ignore the opt-out requirement.