The Personal Data Privacy and Security Act

The good news is that the U.S. Congress is turning its attention to identity theft. The bad news is that Congress is unlikely to produce truly effective legislation. The Personal Data Privacy and Security Act of 2005 is one bill that attempts to address ID theft and misuse of personal information. It was introduced at the end of June by Senators Arlen Specter and Patrick Leahy. Text of the bill is available from thomas.loc.gov.

The bill's summary sounds good:

The bill does have some sensible provisions. It would specifically prevent companies from selling social security numbers, for example, without explicit consent of the individual. The bill would also require notification to individuals that their personal information had been compromised, and would require "data collectors" to disclose information being collected upon request. The bill would also beef up penalties for identity theft, and for concealing security breaches.

While there is a lot to like about the bill, it has more than its share of flaws. Section 422 of the act requires "any business entity or agency engaged in interstate commerce that involves collecting, accessing, using, transmitting, storing, or disposing of personally identifiable information" to provide written notification of an information compromise or, if the address is unknown, notification by phone. The problem with requiring a written notice or phone call is that many sites that would be required to comply with the law do not necessarily collect addresses or phone numbers. Forcing them to start gathering that information would be burdensome, intrusive on the privacy of the people who are allegedly being protected, and would add to the amount of data that can be stolen in the event of a successful attack.

The act also provides for a posting on the affected site, if more than 1,000 residents of the U.S. have been affected, and notice to "major media outlets serving that State or jurisdiction" if more than 5,000 residents of a state or jurisdiction are affected. However, these seem to be aggregate requirements -- so if a company has been affected, it seems to require that they notify all individuals by phone or mail, and post a notice, and send notice to "major media outlets."

There are a few flaws of omission in the bill as well. For example, as Jon Oltsik points out, there's no provision for monitoring compliance with the bill. While the bill prescribes heavy penalties for failing to comply, the only way that non-compliance will come to light, in the bill's present form, is once it's too late and a breach has occurred. This is of little comfort to those who have already had their information stolen and misused. Penalties for misuse and theft of data are fine, but prevention would be much better.

While the bill requires data collectors to disclose information upon request, it does not require any notification of collection. It's unlikely that the average person even knows what organizations are collecting data in the first place. To really "ensure privacy" the bill should prevent unauthorized data collection altogether.

Also, the bill protects social security numbers, which in and of itself is a good thing, but too specific. To be truly effective, now and in the future, the bill should cover any government-issued IDs. For example, it would be prudent to include IDs that fall under the Real ID Act.

It would be nice to see a national data security law that would provide notifications to individuals in the event that their information has been stolen, and give additional control to individuals over the aggregation and dissemination of personal data such as social security numbers. The proposed Personal Data Privacy and Security Act of 2005 takes some tentative steps in the right direction; hopefully its weaker points will be addressed as the bill moves forward.