This is more a voluntary procedure that gives the assurance that the company you're dealing with at least understands password security. It makes no guarantees

This is more a voluntary procedure that gives the assurance that the company you're dealing with at least understands password security. It makes no guarantees that they still aren't trying to steal your password or otherwise have something to gain by stealing your password. Most instances of plain-text or weak password hashing are due to incompetence or laziness, not malice.