Consider all of the confidential information a banker has about you and your company. Now what if, the banker pictured, read a private email that you wrote to someone else, with private personal information on it. Would you want to bank with that bank? Would you file legal suit on that bank? Plus, it is even made worse if the email had a disclosure saying: "This is a private correspondence, no person except the person it is addressed to may read, quote or use this letter."
Bank Presidents and Officers must exercise great care in protecting the privacy of information they gather on people, because there are legal liabilities if a bank intentionally defames a person or invades the privacy of an individual. A few years ago, laws and regulations were passed to protect people from business interests disclosing information that might be harmful or cause distress to consumers or other businessmen. It would seem, that some never got the message. Boothe and Associates, does consulting for banks just to teach their officers and employees "What not to say in writing" to keep banks out of trouble. "You would be amazed at how unwise some bankers can be and some of the mistakes that they make in writing." said Ben Boothe, Sr., who has served as a bank consultant in 30 states and for the World Bank in several nations.
Like the bank whose officer wrote a letter to "non bank" individuals, stating that a person who wanted to do business with the bank had 7 years earlier had a conflict with a regulatory agency. Secondly, the letter, on bank letterhead said: "And (name of citizen) I have reviewed correspondence that indicates that (name of citizen) is financially unstable, and therefore we do not wish to have anything to do with him (paraphrased)." For now, the name of the person and the name of the bank will remain unspoken, while the attorneys or regulators do their thing. No doubt this and other cases will emerge, and we encourage readers to tell us your stories and experiences. We may publish them in Global Perspectives. But this case illustrates the liability and standard of care that responsible bank officers and employees should abide by.
I was a bank president for many years and we always instructed our officers to be very careful in sending out letters on letterhead, and whatever do not slander, libel, or invade the privacy of anyone in writing. Let us disclose that we are not attorneys but we have conferred with legal experts and this is what they tell us:
"Defamation" is the general term used internationally, and is used in this article where it is not necessary to distinguish between "slander" and "libel". Libel and slander both require publication. The fundamental distinction between libel and slander lies solely in the form in which the defamatory matter is published. If the offending material is published in some fleeting form, as by spoken words or sounds, sign language, gestures and the like, then this is slander. If in writing it is Libel.
Libel is defined as defamation by written or printed words, pictures, or in any form other than by spoken words or gestures. The law of libel originated in the 17th century in England. With the growth of publication came the growth of libel and development of the tort of libel.
Cases involving libel
An example of libel would be the case of New York Times Co. v. Sullivan (1964). The U.S. Supreme Court overruled a State court in Alabama that had found The New York Times guilty of libel for printing an advertisement that criticized Alabama officials for mistreating student civil rights activists. Even though some of what The Times printed was false, the Court ruled in its favor, saying that libel of a public official requires proof of Actual Malice, which was defined as a "knowing or reckless disregard for the truth". A person who does not confirm facts, by specific and documented actions could be considered in reckless disregard.
There are several ways a person must go about proving that libel has taken place. For example, in the United States, the person must prove that the statement was false, caused harm, and was made without adequate research into the truthfulness of the statement. If it caused emotional harm or distress, this would qualify for harm. These steps are for an ordinary citizen.
Many nations have criminal penalties for defamation in some situations and different conditions for determining whether an offense has occurred. ARTICLE 19, a free expression advocacy group, has published global maps charting the existence of criminal defamation law across the globe. A letter written on bank letterhead qualifies as libel and the content of the letter noted qualifies as defamation.
In the public eye, in the world of business, and the world of banking, often people can be harmed, indeed economically destroyed by a few choice words of a banker or business executive.
In this case, we learned that a bank officer in a Dallas bank, wrote to at least 2 (non bank employee) people:
"This person had issues with a regulatory agency 7 years ago..." but as we at Global Perspectives investigated we found that the person in question was never found to have committed fraud, nor was any criminal activity claimed, accepted or agreed to. The banker who wrote the letter never bothered to contact the individual he was writing about or his representatives to get a balanced understanding of the facts. If he had, he would have found out that in fact, other agencies of the same state, have accepted and licensed that same person, providing statements of "No recorded cases of criminal or legal violations". To make things worse, then the banker letter said: (paraphrase)
"Also we have found that the person may be in financial difficulty, financially unstable and if so, we would not want to have anything to do with him."
Now when, in the name of banking regulations, not to mention ethical standards, or internal bank policies, does a banker have the right to disclose the private financial information such as the above, in a manner that could imply things that create a devastating impact upon a citizen's reputation. When we investigated further, we found that the officer who wrote this letter, made no attempt to contact the person that he was writing about. Our understanding of the law is that this falls within the laws of invasion of privacy. Of the four major tenants of that law, this banker may have broken 3 laws. The banker apparently did not attempt to confirm the "facts" of this financial "instability" that he proclaimed as a bank officer. Indeed the banker wrote this letter to another private citizen, who we contacted and told us: "I was astonished at this, I had no idea that bank officers or employees could say such things legally". In truth, we gained information and found that the person claimed to be financially unstable has multiple properties and a good financial worth.
Privacy Laws: The privacy laws of the United States embody several different legal concepts. One is the invasion of privacy, a tort based in common law allowing an aggrieved party to bring a lawsuit against an individual who unlawfully intrudes into his or her private affairs, discloses his or her private information, publicizes him or her in a false light, or appropriates his or her name for personal gain.
Modern tort law
- Intrusion of solitude: physical or electronic intrusion into one's private quarters or use of one's private emails or electronic information.
- Public disclosure of private facts: the dissemination of truthful private information which a reasonable person would find objectionable, harmful, or even cause emotional pain and suffering.
- False light: the publication of facts which place a person in a false light, even though the facts themselves may not be defamatory. Disclosure of facts not personally investigated or confirmed, or disclosing facts in such a way as to put a bad image on an individual
- Appropriation: the unauthorized use of a person's name or likeness to obtain some benefits, of the use of one's name or likeness in a manner that harms him, harms his reputation.
Upon review of the 4 foundations of tort law, relating to privacy, it would appear that this bank (through their officer, who wrote his letter with his title and on bank letterhead) violated at least 3 levels of law, and perhaps all four, when he used correspondence of an email, intended for another person, which had a "do not use if you are not the party this is intended for" statement at the bottom, and then defamed the person by stating that he was financially unstable.
Thus, a good attorney would not have to use much imagination to see numerous ways that the bank violated privacy, created harm, libeled a person, and did it all in the name of the bank.
Now, I come from a banking background, have owned and operated banks. I understand the laws, but in my banks, we did not allow our bank employees or officers to send out letters to the public that would be harmful, libelous, invade privacy, or cause personal emotional stress or harm anyone's image or reputation. We have all opened those letters from banks and other business institutions telling us how much private information about us that they have and disclose. But never does the law allow, or suggest that a bank, or any businessman can say things that might damage the reputation of private citizens.
This article is intended to remind bankers and business executives to train your people to be responsible, because a mistake like the one made by the bank used as an example in this article, could cost a bank huge legal liabilities. One must wonder what a "higher authority" would do to officers who harm the reputation, or cause emotional duress to others, because of written statements on bank letterhead.
We saw this image and thought it might be relevant for bankers who have not learned the power of discretion.
THE POWER OF DISCRETION:
As a young man, Marvin Carlile, a hero of banking in West Texas hired me and trained me to run a bank one day. He showed me that if people gained a trust in their banker, they made loyal, long term customers for the bank.
"The people must respect a banker, must understand that he knows financial secrets of the people and that he is discrete. He will never tell those secrets of the financial temple."
I have met bankers that are that way. Their customers know that they know, but their customers also know, that they can trust their banker without doubt, because his power is in his discretion.
"Marvin Carlile knew every man's financial strengths, every man's secrets of success, every man's weaknesses, and yet every man came to him for help." That was a power of relationships. Unfortunately, some bankers of today do not have those
qualities of the banker ethic. They either lost their way, or never had it. We urge bank customers to seek out those bankers who have the integrity and the gift of discretion. In that way you will find that your
banker can become a hero for you and for your community.