16 CFR 313.7 deals with Form of opt out notice to consumers and opt out methods for credit card customers. If required to provide an opt out notice, the credit card issuer must provide a clear and conspicuous notice to each of the consumers that accurately explains the right to opt out under that section.
Moreover, the notice must state:
- That the issuer disclose or reserve the right to disclose nonpublic personal information about the consumer to a nonaffiliated third party;
- That the consumer has the right to opt out of that disclosure; and
- A reasonable means by which the consumer may exercise the opt out right.
Reasonable opt out means that the issuer provides a reasonable means to exercise an opt out right if it:
- Designate check-off boxes in a prominent position on the relevant forms with the opt out notice;
- Include a reply form that includes the address to which the form should be mailed; or
- Provide an electronic means to opt out, such as a form that can be sent via electronic mail, if the consumer agrees to the electronic delivery of information; or
- Provide a toll-free telephone number that consumers may call to opt out.
Unreasonable opt out means that the issuer does not provide a reasonable means of opting out if:
- The only means of opting out is for the consumer to write his or her own letter to exercise that opt out right; or
- The only means of opting out as described in any notice subsequent to the initial notice is to use a check-off box that the issuer provided with the initial notice but did not include with the subsequent notice.
Specific opt out means that the issuer may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer. The opt out notice must explain how the issuer will treat an opt out direction by a joint consumer. The issuer must comply with a consumer’s opt out direction as soon as reasonably practicable. A consumer may exercise the right to opt out at any time. A consumer’s direction to opt out is effective until the consumer revokes it in writing or, if the consumer agrees, electronically.
When the interest rate of a credit card increases, the cardholder will typically have an opt-out period to reject the interest rate change. A cardholder’s opt-out letter must be sent via certified mail with return receipt requested, within 15 days of receiving notification of the rate increase or by the date listed on the rate increase notification. Follow up with the credit card issuer is recommended to be sure the opt-out was processed. If the cardholder opts-out, the account will be closed and s/he can continue to pay the balance at the lower interest rate. However, once the balance has been completely repaid, the cardholder will not be able to use the card, since the account has been closed.