content/blog/2022-08-31-privacy-com-changes.org

  1#+date:        <2022-08-31 Wed 00:00:00>
  2#+title:       Analysis of Recent Privacy.com Terms and User Impact
  3#+description: Detailed examination of modifications to Privacy.com service terms and their implications on user privacy and payment security protocols.
  4#+slug:        privacy-com-changes
  5#+filetags:    :privacy:finance:terms_changes:
  6
  7* Privacy.com Changes Their Terms
  8
  9Recently, Privacy.com reached out to their customers regarding a change
 10in their terms of use. Further, all customers are required to agree to
 11the changes in order to continue using their accounts.
 12
 13[[https://privacy.com/commercial-cardholder-agreement][You can view the
 14new cardholder agreement here]].
 15
 16When you log in, you'll be greeted with a pop-up window asking you to
 17review and agree to the new terms of use. You will also not be able to
 18open any new cards until the terms are agreed to.
 19
 20** Changing from a "Prepaid Debit" Model to a "Charge Card" Model
 21
 22The actual content of the changes is interesting. While the historical
 23model of using Privacy.com was akin to prepaid debit cards, the new
 24model is very similar to a credit card (they use the term "charge
 25card").
 26
 27I have used Privacy.com for 1-2 years, and the process was always that
 28you would create a single-use or merchant-locked card. This card could
 29be used for any dollar limit you set and would immediately draw the
 30funds from whatever funding source you connected, e.g. PayPal account or
 31a bank account.
 32
 33The benefit this service provides with a premium account is masking the
 34merchant names from your funding source. If you have a concern that your
 35bank account uses merchant data from your account, you could direct all
 36charges through Privacy.com and set the merchant as one of their pre-set
 37options, such as "Smiley's Corner Store" or "NSA Gift Shop."
 38
 39The new model still works with a bank account as a funding source, but
 40the model is changed so that you get a "line of credit" set according to
 41a 14-day billing cycle. It seems that Privacy.com will now allow charges
 42to be incurred without being immediately paid.
 43
 44** Daily Payments and Available Credit
 45
 46Instead of paying as charges are incurred, you must make a "Daily
 47Payment" and your "Available Credit" will be locked until you make that
 48payment. There are also "End of Billing Cycle Payments" that are
 49assigned a due date.
 50
 51Further, Privacy.com will decline charges that would cause you to exceed
 52your Available Credit or Credit Limit.
 53
 54One particular interesting section states the following:
 55
 56#+begin_quote
 57YOUR OBLIGATION TO PAY US BACK FOR ALL CARD TRANSACTIONS AND OTHER
 58OBLIGATIONS YOU INCUR IS SECURED BY THE SECURED ACCOUNT. IF YOU DO NOT
 59PAY US BACK FOR ANY AMOUNT YOU OWE US WHEN YOUR PAYMENTS ARE DUE, WE
 60WILL EXERCISE OUR INTEREST AND DEBIT THE SECURED ACCOUNT, AND YOU WILL
 61LOSE THE MONEY IN THE SECURED ACCOUNT. SEE SECTION 8: SECURITY AGREEMENT
 62FOR MORE INFORMATION.
 63#+end_quote
 64
 65** Personal Information
 66
 67Now that Privacy.com is more of a financial institution, they are
 68obligated to comply with the
 69[[https://en.wikipedia.org/wiki/Know_your_customer][know your customer]]
 70guidelines/laws.
 71
 72I did not proceed with the change to my Privacy.com account, but I have
 73heard from some peers that the changes require more personal information
 74to be submitted, such as SSN. I am not aware of all new personal
 75information required or if the funding source is now required to only be
 76a bank account.
 77
 78** Fees
 79
 80Luckily, the fees section did not change much. The subscription fees for
 81a premium account are still the only fees.
 82
 83* My Thoughts
 84
 85Personally, I wiped my personal information from my account and then
 86permanently deleted it when I heard about these changes. I have no
 87interest in yet another method of credit lending offered by private
 88companies. While I accepted that they would have access to my bank
 89account information for the purposes of paying off my prepaid debit
 90payments, I have no interest in incurring charges that will need to be
 91paid back at a later date. I also have no interest in submitting
 92personal information to Privacy.com.
 93
 94This type of change toward a "buy it now, pay us later" model is
 95concerning, and I will be watching Privacy.com to see if they further
 96their interests in the credit model as time goes on.
 97
 98Could we see them start charging interest, fees, etc.? I'm not sure, but
 99this change does not inspire confidence in their mission as a
100privacy-focused company.