Sunday, March 06, 2005

Personal information is a powder keg -- or an underground storage tank

When giving presentations to companies on managing privacy risks, I often describe customer databases as akin to underground storage tanks. If something goes wrong with them, the results can be absolutely disastrous. If you really need the data and its value outweighs the risks, you can keep it in the ground but make sure it is taken care of. If you don't need the information, rid of it. Customer data is either an asset or a liability. If it ain't an asset, at best it is a potential liability. If something goes wrong, it is a huge liability. A couple of drips from your underground tank will taint your property. One leak of customer data can taint your company.

Until PIPEDA came along, there was no law in Canada that restricted what information a company could collect and how long it could be maintained. (PIPEDA says you can only retain information as long as is reasonably necessary for the purposes for which it was collected, which also assumes that it was collected with the knowledge and consent of the individual.) Many businesses routinely keep customer data they don't use, thinking that it may be useful some day. Some businesses kept it because it is cheaper to buy bigger hard drives than to think about how long to keep it. My local video store, I am sure, could tell you what I rented years ago. Why did they keep it? No idea. I never got a call saying "we noticed that you rented Terminator I in 1989 and Terminator II in 1994, and thought you'd like to know that we now have Terminator III." They had no reason to keep the info, but probably did in any event. Keeping that info lying around can put customers at risk and can ruin your customers' chances of becoming a member of the Supreme Court (see EPIC Video Privacy Protection Act Page).

A headline writer at the Washington Post, via Yahoo! News, refers to ChoicePoint's databases as having become a "powder keg" (Yahoo! News - ChoicePoint Data Cache Became a Powder Keg). I'd say that it didn't become a powder keg, it always was one. Blasting powder is obviously useful, but it needs to be protected and maintained. Handle with extreme care. And you shouldn't be keeping it in the shed unless you need it. ChoicePoint obviously thought they needed it (afterall, their business was built on that database), but hindsight says it wasn't adequately protected and it ultimately blew up.

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