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Senate Democrats to legislate identity theft, consumer protection and privacy issues

March 01, 2005
By: Nicole Volhontseff
State Capital Bureau

JEFFERSON CITY - Missouri lawmakers are reacting to the lack of protection for Missourians in the wake of the ChoicePoint Inc. scandal, which affected more than 1,500 people in Missouri and 500,000 across the country.

"The environment for consumers in Missouri has moved from 'buyer beware' to 'buyer be scared,'" said Senator Pat Dougherty, D- St. Louis City.

Dougherty, Sen. Maida Coleman, D-St. Louis City, and several Senate Democrats filed a block of legislation directed at protecting consumers from a range of privacy and ethical issues the ChoicePoint scandal raised.

Last month ChoicePoint Inc. announced it unknowingly sold data to a group of criminals who breached the company's credentialing process. For more than a year, the thieves opened accounts with ChoicePoint under the previously stolen identities of legitimate businesses. The ring received a whopping amount of data such as the names, addresses, Social Security numbers and credit reports of half a million consumers. At least 750 people were defrauded by the stolen information.

ChoicePoint holds consumer information in a massive database which any business or government agency can apply for. The company sells access to people's insurance data claims, motor vehicle data, police records, vital records, credit history, drug screening results, employment background screenings, education background and DNA profiles.

Under Senate Bill 506, all Missouri consumers would be protected from the purchase and spread of their personal information. The bill creates a set of procedures to be followed if companies collect and use personal information like ChoicePoint did.

Due to California law, ChoicePoint was forced to inform each individual who was affected in that state. Only when the knowledge of the scandal reached the rest of the country did ChoicePoint contact the other 465,000 credit victims.

Under Dougherty's bill, companies like ChoicePoint would have to tell their Missouri consumers of information theft. The bill mirrors California's law.

Sen. Coleman introduced SB 128 which would require any products containing a radio frequency identification tag (RFIT) to be disclosed to consumers.

RFIT can be applied to almost any physical item a consumer might purchase. Tagged items would carry a unique embedded chip that sends out an identification signal allowing companies to determine the whereabouts of their products at all times. Marketers already envision monitoring consumers' use of products within their own homes. Coleman wants companies to be required to inform consumers whether a product contains an RFIT.

"While radio frequency technology may help businesses track merchandise from production to purchase, many fear that the technology will be used to spy on consumers," Coleman said.

The third bill in the package, SB 504, sponsored by Sen. Dougherty, creates an Office of the Inspector General to oversee all privatization efforts by the state of Missouri. There is currently no formal system for citizens, legislators or public employees to be involved in privatization decisions. The private sector is unable to make suggestions or lodge complaints about alleged competition or the use or misuse of private services because no formal process to do so exists.

Last December the Joint Subcommittee on Competition and Privatization recommended the creation of a board to analyze and oversee the privatization of state services. Dougherty is seeking to institute that office.

"Nothing will hurt Missouri consumers more than having essential public services sold off to profiteers who will not deliver quality service and will charge exorbiant prices," Dougherty said. "At a time when we are looking for more efficient government and the possible privatization of some services, we need a watchdog for the taxpayers of this state."

The Office of the Inspector General would be responsible for evaluating the efficiency and effectiveness of non-state agencies receiving state funds. The office would document waste, fraud and abuse and identify significant problems within privatized businesses. They will also be responsible for ensuring tax credits offered under the state statute are used for proper purposes.