Privacy Groups Herald House Data Breach Bill - InformationWeek

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3/31/2006
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Privacy Groups Herald House Data Breach Bill

A House committee has given the green light to a data breach bill that consumer advocates have been clamoring for. One lawmaker says the bill's message is simple: "If you can't protect it, don't collect it."

The House Energy and Commerce Committee unanimously approved a federal data breach bill this week that consumer advocates applauded as "a reasonable compromise" between citizens' protection and businesses' responsibilities.

The 41-0 vote Wednesday on the Data Accountability and Trust Act (DATA) moves the legislation to the full House, where it's not yet scheduled for a vote.

"The bill sends a clear message: 'If you can't protect it, don't collect it,'" said Rep. John Dingell (D-Mich.), the committee's ranking member, in a statement.

Among the bill's provisions are those that will require businesses and organizations that experience a data breach to "notify each individual of the United States whose personal information was acquired by an unauthorized person as a result of such a breach."

Other parts of the bill assign enforcement duties to the Federal Trade Commission, require data brokers to have security policies, and demand audits of companies that let data loose or are hacked.

"We're pleased with the compromise 'trigger' language relating to when a business must notify individuals of a breach of their personal information," said several privacy advocacy groups in a joint statement issued the day before the vote. The Center for Democracy & Technology, the Privacy Rights Clearinghouse, and Consumers Union -- the latter the publisher of the popular "Consumer Reports" magazine -- urged the committee to approve H.R. 4127.

"Notification is critical because it provides a marketplace incentive for companies to keep our information secure and tells individuals that they are at increased risk for identity theft so that they can take reasonable steps to prevent becoming victims," the statement continued.

"There are, of course, changes we would like to see to the bill . . . however, we believe [it] represents a reasonable compromise."

Those comments were in stark contrast to criticism that some of the same groups blasted at the House Financial Services Committee two weeks ago when it approved a different bill, H.R. 3997, the Financial Data Protection Act.

Then, Susanna Montezemolo, a Consumers Union policy analyst, said, "This bill is like buying a fire detector after your house has burned down -- it is too little, too late."

According to the Privacy Rights Clearinghouse, an estimated 22.9 million identities have been compromised in the first three months of 2006 in 41 separate incidents.

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