Barister's Brain
As a regular feature in Quarterly Interest, our advice columnist, Barry Barrister, will answer a legal question the OSBC has received that we think would be of interest to bankers. Even though he's a fictional lawyer (arguably the best kind), Barry has insisted we include the caveat that the advice he dispenses is general in nature, and is not intended as a substitute for obtaining specific legal advice from counsel when necessary.
Dear Barry,
A local mortgage company is sending our bank customers written solicitations asking that they refinance their mortgage with the company. The company is listing our original mortgage amount in the mailing, but they are not referencing our bank by name. Our customers are calling us and asking why we are giving out their mortgage information to others. Obviously, we are not giving out the information; the companies are getting it from another source, likely public records. Is there anything we can do to stop this practice?
- Bothered Banker Bob
Dear Banker Bob:
There is a relatively new provision in Kansas law that may be helpful. K.S.A. 2005 Supp. 81-301 was enacted to prohibit unauthorized use of a lender's name, trade name or trademark. However, another provision in that law goes even further and provides:
"No person may include a loan number, loan amount or other specific loan information that is publicly available in a solicitation for the purchase of products or services and allowed in K.S.A. 45-230, and amendments thereto, unless the solicitation clearly and conspicuously states in bold-faced type on the front page of the correspondence that the person is not sponsored by or affiliated with the lender and that the solicitation is not authorized by the lender, which shall be identified by name. The statement shall include the name, address and telephone number of the person making the solicitation and that any loan information referenced was not provided by the lender."
For any violation of the new law, the lender that is the victim may seek an injunction in court. Damages need not be proven; the law says they are presumed. And, provided that you prevail in the action, you are entitled to recover costs associated with the action and reasonable attorney's fees.
Once you review the solicitation carefully with your own legal counsel to ensure that a violation has occurred, you can decide how to use this new law to protect your institution.
Lawfully Yours,
Barry
