US parties split on proposed data protection and notification laws

The Washington Post is continuing to chronicle the ongoing debate between the US political parties on proposals to implement a federal privacy law to protect consumers against indentity theft. Privacy advocates are very concerned that the process will result in a weak law that pre-empts much more rigorous state laws, such as that in California. The California law is largely responsible for the wave of publicity about privacy breaches in the last year.

Parties Split on Data-Protection Bill:

"... Under the bill, data brokers and other firms that store consumer data would have to notify consumers that their information was breached only when it was determined that a 'significant risk' of identity theft or other fraud might result.

That decision would be made by the company that was breached, which Democrats said was akin to having to no requirement at all.

This year alone, tens of millions of consumers have been notified of breaches at information brokers such as ChoicePoint Inc. and LexisNexis, financial institutions, government agencies, universities, online retailers and other firms.

Many notices were sent out under a California law that covers any firm doing business in the state.

'No notices would have gone out under the standard put forth in this bill,' which would preempt state laws, said Rep. Janice D. Schakowsky (D-Ill.). 'We would not have known how badly corporations treat personal information, nor would consumers have been able to take action to protect themselves -- even from financial identity theft -- if this bill had been in place in February 2005.'

Data brokers, direct marketers, financial institutions and several large technology companies supported the approach of the bill, as did FTC Chairman Deborah P. Majoras. They argue that thieves or hackers cannot always use data they might gain access to, and that bombarding consumers with notices every time a breach occurs would cause people to ignore them...."