ChoicePoint scandal driving tougher global privacy standards

From today's Palm Beach Post:

ChoicePoint scandal driving tougher global privacy standards:

"WASHINGTON - U.S. corporations are sending more personal data for processing overseas in a 'race to the bottom' for lower costs. But a consumer-driven 'race to the top' for tougher privacy standards should help protect that information, one expert said Friday.

The trend toward stricter rules has gotten a big boost from the ChoicePoint scandal, Privacy Times editor Evan Hendricks said Friday....

Hendricks discussed the case's impact at a seminar, "Offshoring and Privacy: Consumer Data in the Global Economy," sponsored by the Brookings Institution, a research group.

"In the long run, I'm optimistic" about improving privacy because the ChoicePoint scandal has so dramatically underscored the risks of failing to protect consumers, he said. The company, which sells data including Social Security numbers, property records, bank accounts and criminal histories, has been hit by dozens of lawsuits as its stock has dropped.

In recent years, a growing number of U.S. companies have been using the Internet to send financial and other personal information to contractors operating in India, the Philippines and other countries where wages are lower.

One of the speakers defending the practice was Kiran Karnik, president of the National Association of Software and Services Companies, which promotes India as a trusted outsourcing destination.

Karnik said it's natural for people to question the wisdom of sending sensitive data far away, especially across borders. People in the industry "very much understand" that people often distrust foreigners, and "deep down" don't want them seeing personal data, he said.

But he said U.S. companies require their contractors to follow the same laws as if they were based in America.

In addition, he said, India is revising its domestic privacy laws to satisfy concerns of its European and U.S. customers. Karnik's group and the Information Technology Association of America held a conference in New Delhi in October on this topic.

The same pressures are likely to lead to even tougher rules in the future. Hendricks said that in a global economy, European companies will want to be able to do business with contractors in the United States, India and other countries."