Thursday, April 20, 2006

Anti-ID-Theft Bill Watered Down

Wired News: The Anti-ID-Theft Bill That Isn't This Bruce Scheier authored article in Wired News is an excellent assessment of the reasons that data breaches and data theft is rampant and worsening. Those who hold the data face little to no risk of financial loss when their data is breached.

A California law requiring disclosure of data breaches lead to major press coverage of first the ChoicePoint breach, then CardSystems, CitiGroup, Lexis/Nexis, etc. over the past year or so. The press coverage due to the required disclosure laws and public battering (in the press) taken by those companies that lost the data is the only reason that identity theft and data breaches has gotten so much attention recently.

The law proposed in Federal legislation has been watered down and weakened to the point of being protective of those businesses which treat private financial information they hold on consumers in so cavalier a manner that they sell it to criminals posing as businesses, lose it to unprotected and casual shipment methods like UPS, and suffer hacking attacks and computer thefts and dozens of other potential Ooops! moments.

Until companies face strict liability for loss of sensitive information they hold, they will continue to treat that information in a cavalier manner. Right now they have lobbyists in Congress seeking watered down legislation that will essentially absolve them of blame and relieve them of the duty to notify those exposed to the risk of identity theft.

But the biggest problem in that federal legislation is the fact that it preempts stronger state legislation curently in effect in 23 states and relieves data brokers and financial institutions of responsibility or public shaming. Data breaches will return to obscurity and the press will no longer have anything to report on, due to lack of disclosure of those breaches, thefts or hacking losses by data brokers and financial institutions that lose it.

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posted by RealitySEO at 10:25 AM


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