Final answer:
Under the Customer Identification Program, financial institutions are required to inform customers why they are collecting information, which makes the given statement B) False.
Step-by-step explanation:
The question pertains to the Customer Identification Program (CIP), which is a requirement by federal law for financial institutions.
Under the CIP, institutions are required to verify the identity of individuals who wish to conduct financial transactions. The statement given is B) False.
Financial institutions must inform their customers why they are collecting certain information. This serves as a measure to prevent identity theft and ensure the safety of customer data.
Customers should always be prepared to provide the necessary information, and they have the right to ask why information is being collected, how it is going to be used, and who will have access to it.
Additionally, it is recommended for customers to monitor their credit history for any red flags that might indicate their identity has been compromised.