Data Brokers Vow to Protect Personal Info

Two captains of the information-broker industry recently told a congressional panel that they would support new regulations to better protect sensitive personal data that they collect and sell on virtually every adult American.

But the executives balked at a growing bipartisan consensus among key House and Senate members that the sale of Social Security numbers for commercial purposes should be banned unless individuals give their permission.

"When my Social Security number and my information is routinely given out without my permission, it's just wrong," said Rep. Joe Barton (R-Tex.), who heads the House Energy and Commerce Committee. "And in the Internet age, it's dangerous."

Barton said Congress would consider a measure in which permission would be required for the trading or sale of such data except to law enforcement agencies, in addition to other steps in order to increase oversight of the largely unregulated data-broker industry that has been recently rocked by a series of security breaches.

ChoicePoint Inc., one of the nation's largest brokers, announced in February that personal information on nearly 145,000 consumers was purchased from the company by thieves masquerading as legitimate business people.

LexisNexis Group, another big broker specializing in business and legal data, announced last week that thieves had penetrated its systems and obtained data on 32,000 consumers.

The Chief executive of LexisNexis Corporate and Federal Markets, Kurt Sanford, endorsed a proposal by the head of the Federal Trade Commission that would extend the same security guidelines to data brokers that financial institutions must follow.

Sanford also agreed with having a federal law which requires notification of consumers if their personal information has been obtained by thieves. Currently, California is the only state having such a law.

But Sanford said to ban all sales of Social Security numbers would be a mistake, because "there are circumstances where the sale is in the consumers' best interests." For example, he said, independent investigative agencies might need such data to help fight identity fraud. Businesses, he added, need it to help collect unpaid debts.

Derek V. Smith, chief executive of ChoicePoint, agreed. "I believe that only by adding a more formal structure to the current scheme of information use will we realize the value of technology-based tools to society," Smith said. Both he and Sanford used the hearing as a platform to apologize to consumers whose data have been compromised, as well as to assure Congress that they have tightened their systems to try to prevent such fraud.

But some members of the House subcommittee on commerce, trade and consumer protection were unimpressed by the companies' efforts.

In a series of rapid-fire questions, Rep. Edward J. Markey (D-Mass.) pressed Smith on whether he would lengthen the credit-alert monitoring period ChoicePoint has offered to consumers whose information was stolen.

"What about lifetime monitoring?" Markey asked. "One year is not enough. What about five years? Can you guarantee that?" He said thieves might simply lie low for a year before trying to access consumers' accounts.

Smith, appearing rattled, said he would consider extending the service but declined to commit.

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