Even before the first witness had been called, members of the U.S. House of Representatives were lining up to take shots at the compiled data industry during a committee hearing on Tuesday.
The overarching themes included expanding the Federal Trade Commission’s ability to regulate a wider swath of data, and using government data contracts – or the withholding of the same – as either a carrot or a stick. And a few Democratic representatives, including Edolphus Towns of New York and Jan Schakowsky of Illinois, criticized ChoicePoint for its reported errors in purging Florida voting rolls of eligible voters with names similar to those of convicted felons during the months leading up to the 2000 elections.
(During his testimony, ChoicePoint CEO Derek Smith said that the actual work on the Florida voting rolls had been done by Database Technologies, a firm ChoicePoint acquired after it had finished its work scrubbing the lists. ChoicePoint acquired the company in May 2000.)
“Despite its power, profit and reach, the burgeoning data brokerage industry is largely unregulated,” said Schakowsky during her opening remarks. The lack of regulation of data brokers is especially disturbing, Schakowsky said, “because of the government reliance on them. One report says that the number of government agencies using data brokers is about 7,000, from local police stations to the Department of Justice, with $67 million in contracts to ChoicePoint in 2004 alone.
“Hundreds of millions of dollars are flowing each year from taxpayers’ pockets to and into the data brokers banks,” Schakowsky continued. “If we are going to be using taxpayer dollars to pay for these services, we need to make sure data brokers are accountable when it comes to security and accuracy of the data they are compiling.”
Schakowsky was followed by Rep. Joe Barton (R-TX), who said that while he stopped carrying his Social Security Card a number of years ago, it would not be difficult for him – or, assumedly, someone else – to gain possession of the number.
Barton also noted that his wife had her Social Security number stolen, a theft that was discovered when someone used it to obtain medical services in a Dallas hospital.
“Not long ago, your Social Security number was between you and the government and nobody else,” he said. “Now, everybody seems to have your number. The constraints are so flimsy they are laughable. I personally see no socially redeeming value in anyone having the right to market or use Social Security numbers and other personal information without my approval. If a company wants to use my life for their profit, they ought to ask me first.”
Rep. Sherrod Brown (D-OH) likened data brokers to banks, ones in which the lock is old, the night watchman’s vision isn’t what it used to be, and they have no alarm system.
“Crooks know the bank is an easy mark, so the depositors keep taking it on the chin,” Brown said. “Would we consider responding only with tougher bank robber penalties, and mandatory robbery disclosures? Of course not. We would make sure that the bank got a state-of-the-art lock, Lasik surgery for the guard, and an alarm system designed maybe for a nuclear missile site.
“We ought to consider a similar approach here. We ought to give the FTC clear authority to set and enforce tough rules for data protection. We ought to make all of these rules seamless so the bad guys can’t sneak in through the cracks. We ought to use the government’s purchasing power to promote best practices to take security beyond the bare minimum.”
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