What does the term "opt out" refer to in the context of nonpublic personal information?

The term "opt out" in the context of nonpublic personal information refers to the customer's right to limit the disclosure of their personal information. Specifically, it means that customers must be provided with the opportunity to refuse permission for their information to be shared with third parties. This concept is rooted in privacy protection laws, which emphasize the importance of consumer rights and the ability to control one's personal data.

When customers are given the chance to opt out, it empowers them to take a proactive role in managing their privacy and ensuring that their information is not shared beyond a certain point. This practice not only helps build trust between consumers and businesses but also aligns with regulations that mandate clear communication about how personal data is handled.

In contrast, the other options describe situations where customer consent is either required for all disclosures, where customers have no control, or where disclosure occurs automatically—none of which accurately reflect the proactive nature of the opt-out process.